An worker handles one kilogram of gold bullions on the YLG Bullion Worldwide Co. headquarters in Bangkok, Thailand, on Friday, Dec. 22, 2023.
Chalinee Thirasupa | Bloomberg | Getty Photos
Gold jumped to a report Tuesday as rising expectations of a September rate of interest minimize bolstered demand for bullion.
Gold futures settled up 1.6% to an all-time closing excessive of $2,467.8 per ounce, after additionally hitting a brand new intraday report excessive of $2,474.5 throughout the session. Gold futures costs have climbed greater than 19% this yr.
Spot gold jumped 1.9% to $2,468.68 an oz throughout the session. LSEG knowledge exhibits that is an all-time excessive going again to 1968, with out adjusting for inflation.
Gold costs hit report highs earlier this yr earlier than pulling again because the prospect of higher-for-longer rates of interest dampened investor enthusiasm for the valuable metallic. However curiosity within the asset has grown after June’s softer inflation knowledge and a few lately dovish feedback from Federal Reserve Chair Jerome Powell mixed to lift the chances of price cuts coming this yr. Markets are pricing in 100% odds of a price minimize in September now, in response to futures buying and selling tracked by the CME FedWatch instrument.
Gold futures, 5 years
A weakening greenback has additionally supported demand for bullion. On Tuesday, the U.S. dollar rebounded after falling to a five-week low.
“Curiosity to ‘buy-the-dip’ remained prevalent amongst traders amid robust sentiment in the direction of gold, which is probably going why the market was fast to rally on mushy U.S. knowledge prints and dovish Fed expectations,” UBS strategist Joni Teves mentioned in a notice on Friday.
“With the market sitting simply above the psychological $2400 stage, we expect dangers are skewed to the upside,” Teves continued. “We expect positioning stays lean and there is house for traders to construct gold publicity.”
Gold rallied to report highs within the first half of 2024 on the again of a multiyear spike in demand from central banks all over the world, as mounting international geopolitical dangers boosted curiosity within the secure haven asset. Based on UBS, central financial institution shopping for of bullion is the very best it has been for the reason that late Nineteen Sixties.
“With some central banks now questioning the protection of holding USD- and EUR-denominated belongings (following the monetary and debt crises and extra lately the warfare in Ukraine), many are selecting to as a substitute fill their reserves with gold,” learn a notice final month from UBS.
Gold mining shares additionally superior on Tuesday. The VanEck Gold Miners ETF gained 3.4%, posting a fifth successful day in six. The U.S.-listed shares of Concord Gold and Gold Fields rose 16.1% and 6.3%, respectively.
