Gold prices were little changed on Tuesday, but held above the psychological level of $2,500 an ounce. After the close of trading, the metal’s value continued to rise, surpassing $2,560 – above last week’s record – on investor optimism over imminent interest rate cuts in the United States and persistent concerns about the conflict in the Middle East.
Spot gold traded virtually unchanged at $2,515.51 per ounce during the session. In after-hours trading, prices continued to rise and at 7:00 p.m. Central Mexico time it reached $2,560.60 per ounce.
Gold has hit successive record highs this year, up nearly 22 percent so far this year and hitting a closing high of $2,531.60 on Aug. 20, on expectations of an imminent U.S. rate cut and lingering concerns about the Middle East conflict, exacerbated by a major missile exchange between Israel and Hezbollah on Sunday.
“Gold could even surpass $2,700 by the end of the year if the Federal Reserve manages to cut rates by 100 basis points (one percentage point) before Christmas, according to current market expectations,” said Han Tan, chief market analyst at Exinity Group.
A low interest rate environment tends to increase the attractiveness of non-yielding bullion.
Yeap Jun Rong, market strategist at IG, said a rate cut in September was inevitable, but the debate over its magnitude may lead investors to take a wait-and-see approach as they eagerly await the next economic data to anchor their views.
Traders see a 70 percent chance of a quarter-percentage point (0.25 point) cut and about 30 percent see a half-percentage point (0.50 point) cut, according to CME’s FedWatch tool.
San Francisco Federal Reserve President Mary Daly said a quarter-percentage point cut in borrowing costs is likely next month.
“We expect the bullish trend in gold prices to continue, given its positive performance in past Federal Reserve rate easing cycles, healthy demand from central banks and its status as a good hedge against geopolitical and economic risks,” Yeap said.With information from the editorial staff)
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– 2024-09-04 12:24:33
