Bullion Within a Whisker of a Fresh All-Time High
2024-08-19
Summary:
Gold retreated from its $2,500 high on Monday but remained strong, bolstered by hopes of a Fed rate cut at the next meeting.
Gold pulled back from its fresh record high above $2,500 on Monday but remained resilient, bolstered by hopes the Fed is edging closer to cutting interest rates at its next meeting.
Gold Rises on Housing Data and Geopolitical Tensions
Bullion climbed more than 2% the last session as a reading on the US housing market disappointed. The bullish run in recent years has been driven by rising geopolitical risks and central banks' robust demand.
Speculators boosted their net-bullish bets on Comex gold futures to a near four-year high in the week ending 13 Aug, CFTC data show. That came as the battered stocks resumed their rally.
Meanwhile, gold ETFS have risen in recent months following a couple of years of outflows, data compiled by Bloomberg show. Ongoing wars and upcoming US presidential election will still keep investors on edge.
Countries like China, Turkey and India have been looking to diversify their reserves away from the US dollar, especially since witnessing the West freeze Russia's dollar assets in the wake of its Ukraine invasion.
Commerzbank Research raised its forecast on gold to $2,600 by the middle of next year, predicting three Fed rate cuts by the end of this year and three more in the first half of 2025.
Gold kept its strong momentum after crushing another psychological threshold. Trend trading is recommended unless the price heads towards 50 SMA.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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