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Weekly gold gains driven by US monetary policy outlook and global concerns

Gold prices were on track for a second consecutive weekly increase on Friday, bolstered by safe-haven demand amid Middle East unrest and growing expectations of U.S. Federal Reserve interest rate cuts later this year.

Spot gold edged up 0.1% to $2,360.95 per ounce as of 0344 GMT, after reaching a two-week peak in the previous session. The precious metal has gained over 1% for the week.

U.S. gold futures rose 0.2% to $2,374.60.

“The current bullish gold trend is primarily driven by escalating geopolitical tensions, particularly following the recent attack on Gaza,” said Kelvin Wong, senior market analyst for Asia Pacific at OANDA.

Israeli air strikes in Gaza on Thursday resulted in at least 14 fatalities and dozens of injuries.

“The market is now assessing the likelihood of another rate cut after September, which could support gold prices above the $2,300 level,” Wong added.

Also read: Cathie Wood: Will gold be replaced by Bitcoin?

Thursday’s data revealed a modest decrease in U.S. initial jobless claims and a decline in new housing construction. Combined with sluggish retail sales last month, these factors keep a September U.S. rate cut in consideration.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Investors now await the U.S. flash purchasing managers’ indexes due at 0145 GMT.

ACY Securities analyst Luca Santos noted, “While corrections are possible, the $2,300 support level remains crucial for gold. Any significant downturn would likely be influenced by changes in economic indicators or sudden market shifts.”

In other precious metals:

  • Spot silver dipped 0.4% to $30.60 per ounce
  • Platinum rose 0.4% to $982.45
  • Palladium gained 0.8% to $930.98

All three metals are on track for weekly gains.”

Ryan Foxworth
Ryan Foxworth
Ryan Foxworth is a seasoned financial analyst and writer, specializing in market trends, investment strategies, and economic analysis. His expertise lies in interpreting complex financial data and forecasting market movements with precision. Ryan holds an MBA degree, where he focused on finance and macroeconomics. Prior to his writing career, he worked as a portfolio manager at a leading investment firm, managing diverse portfolios and advising high-net-worth clients on wealth management strategies.

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