Gold Prices Hit Record Highs in the US
On Wednesday, July 17, 2024, gold prices in the US surged to record highs, with the futures price for gold rising 0.1% to $2,470.20 per ounce, while the spot price remained steady at $2,466.02 per ounce. In contrast, silver fell by 2.1% to $30.73 per ounce, while palladium rallied by 0.5% to $963.83.
Insight into Market Trends
According to Tim Waterer, chief market analyst at KCM Trade, the recent surge in gold prices may be attributed to a combination of factors such as the upcoming US elections and ongoing global geopolitical risks. These factors could be driving investors to seek refuge in the safe-haven asset that is gold.
Matt Simpson, senior analyst at City Index, highlighted the potential for a price retracement and suggested that $2,450, near its previous record high, could serve as a strategic level for investors to reload on gold for its next leg higher.
Why is Gold on the Rise?
The recent spike in gold prices may be linked to market expectations of an interest rate cut in the US. Traders anticipate a 25 basis point interest rate reduction in September, which could boost the appeal of non-interest-bearing assets like gold.
Waterer emphasized that as investors prepare for a lower interest rate environment, gold has reached a new high watermark. He noted that the $2,500 range is the next target in sight, with the potential for prices to climb even higher by the end of the year if the current momentum persists.
Federal Reserve chair Jerome Powell’s remarks on US inflation aligning with the central bank’s target suggest that an interest rate cut in the US may be imminent, further fueling the demand for gold as a hedge against potential economic uncertainties.
The Role of Chinese Markets
In addition to US economic factors, the Chinese market’s appetite for gold has also influenced the recent surge in prices. After a brief pause in gold purchases in May and June, China has resumed buying the precious metal. This renewed interest from one of the world’s largest gold consumers could contribute to sustained price appreciation in the future.
Overall, the confluence of global economic uncertainties, expectations of an interest rate cut in the US, and strong demand from key markets like China have propelled gold prices to record highs, signaling continued investor interest in this traditional safe-haven asset.
