In a dramatic overnight surge, gold futures soared to unprecedented levels, buoyed by mounting expectations of interest rate cuts by the U.S. Federal Reserve, a decline in U.S. Treasury yields, and escalating geopolitical tensions. Analysts foresee further gains on the horizon for the precious metal.
On the New York Mercantile Exchange, August gold futures edged up 0.2% to $2,472 per troy ounce, briefly touching a peak of $2,487.4 earlier in the trading session. This surpasses the previous all-time high of $2,477 set on May 20, which was followed by a notable market correction.
Daria Efanova, head of research at Sucden Financial, attributed the recent surge in precious metals to growing confidence in imminent interest rate cuts. Historically, gold, as a non-interest bearing asset, tends to perform inversely to interest rates, making it more attractive to investors in a low-rate environment.
“We’re likely approaching the significant milestone of $2,500 per ounce for gold,” remarked Ipek Ozkardeskaya, senior analyst at Swissquote Bank, anticipating potential profit-taking at that level due to current overbought conditions. Ozkardeskaya emphasized the importance of a minor correction to sustain market health.
Vivek Dhar, an analyst at Commonwealth Bank of Australia, highlighted gold’s resilience throughout the year despite fluctuating market dynamics. “While uncertainty remains a factor in the months ahead, there’s a positive bias that could push gold prices beyond our projected $2,500 per ounce by year-end,” Dhar noted.
The trajectory of gold futures reflects a broader market sentiment characterized by economic stimulus expectations and geopolitical uncertainties. Investors are closely monitoring developments as gold continues to assert its status as a safe-haven asset amid evolving global economic conditions.
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