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Gold Prices Set to Soar as Federal Reserve Signals Halt in Rate Hikes and Middle East Tensions Escalate

by Barbara Miller

Despite recent fluctuations, gold traders are maintaining a positive stance, anticipating a continued upward trajectory in gold prices. The consensus stems from a combination of factors, including the belief that the US Federal Reserve will refrain from further interest rate hikes and the escalating tensions in the Middle East, which are bolstering the demand for the precious metal.

In the latest market movements, spot gold prices experienced a slight increase, hovering in the range of $1,978 to $1,990 per ounce on Friday morning, marking a rise of $3.02 or 0.15%. Domestically, gold bars were traded within the range of 33,850 to 33,900 baht, as reported by Hua Seng Heng, a renowned gold trader.

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Amidst the market analysis, it was highlighted that the growing anticipation of a halt in interest rate hikes by the US Federal Reserve could lead to a weakening of the dollar and US bond yields. Additionally, investors are closely monitoring the developments in the intensifying Middle East conflict, further fueling the bullish sentiment.

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Forecasts from industry experts suggest that gold prices could reach a resistance level of $2,000 per ounce, while a support level of $1,970 is expected to be maintained. YLG Bullion and Futures project a sideways upward movement for gold prices, following recent profit-taking sales, particularly after the Federal Reserve Chair Jerome Powell hinted at an imminent end to interest rate hikes.

Furthermore, the recent report from the World Gold Council (WGC) indicated a significant surge in gold purchases by central banks, with net purchases reaching 337 tonnes in the third quarter alone, 8% higher than the five-year average. The WGC foresees this trend continuing for the remainder of the year, driven by the prevailing global uncertainty, particularly attributed to the ongoing conflicts in the Middle East.

While the demand for gold in Thailand observed a 7% growth, with a notable surge in gold bars and coins, the demand for gold jewelry experienced a slight dip of 2%, partly due to price fluctuations.

The future trajectory of gold prices is expected to be heavily influenced by the policies adopted by the US Federal Reserve, as well as the developments in the Middle East conflict. With these critical factors in play, the gold market is expected to witness sustained volatility in the coming weeks. Investors are advised to remain vigilant and responsive to market dynamics.

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