Gold reaches historic high despite weak China demand
2024-10-30
Summary:
Gold prices hit a record high on Wednesday due to uncertainties from the US election and the Middle East conflict, despite a strong dollar.
Gold prices hit a record high on Wednesday thanks to uncertainties surrounding the US presidential election and the Middle East conflict, though the US dollar was near its three-month high.
Bullion rally is set to extend into 2025, as a favourable interest rate backdrop and geopolitical tensions will likely continue to burnish its appeal, a Reuters poll showed. The asset has been up around 35% this year.
Saturday's attack marked the first time Israel has acknowledged striking Iran, bringing the shadow war into the open and crossing a threshold that has led some in the Islamic Republic to question the deterrence capabilities.
Opinion polls still indicate the race between Trump and Harris is too close to call. Both the greenback and Treasury yields have also been buoyed in recent days on signs of Trump's advantage in swing states.
Indian buyers of gold brushed off record high prices and made purchases for festivals starting on Tuesday amid a cooling stock market, industry officials said. That could further support global prices.
However, gold demand in China — the world's biggest consumer — plunged by more than 20% in Q3 as record prices and a sluggish economy dented consumption, especially for jewellery.
Bullion has entered the overbought territory, so a pullback towards $2,860 is likely. But the uptrend is expected to continue with the price moving further away from 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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