Gold Prices Surge to New Heights
Gold prices continued their upward trend, hitting a record high on September 23. This increase is primarily fueled by the US Federal Reserve’s recent interest rate cut and rising safe haven demand amid geopolitical tensions in the Middle East.
As of 0524 GMT, spot gold rose 0.2% to $2,628.25 per ounce, after reaching a peak of $2,630.93 earlier in the session. So far in 2024, gold has gained over 27%, positioning itself for its largest annual increase since 2010. US gold futures also saw a rise, climbing 0.3% to $2,653.00.
Economic Factors Driving Demand
Tim Waterer, chief market analyst at KCM Trade, noted, “The current global economic environment—characterized by declining interest rates and ongoing geopolitical risks—has created a favorable landscape for gold.” He added that the upcoming US election further supports this demand.
Waterer also mentioned that if the Fed maintains its commitment to rate cuts in the coming months, any potential pullback in gold prices may see eager buyers ready to step in, looking for favorable entry points.
Fed’s Rate Cut Plans
The Federal Reserve initiated its easing cycle with a half-percentage point cut on September 18. They project another half-point cut by the end of the year and a full point reduction in 2025. According to CME FedWatch, traders are anticipating a total of 75 basis points in rate cuts by the end of 2024.
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