monsitj/iStock via Getty Images
Gold futures edged higher to hit another record sell-off on Monday, boosted by expectations of interest rate cuts following dovish signals from Federal Reserve chief Jerome Powell's speech at Jackson Hole on Friday.
Analysts say Powell's speech and interest in safe haven assets The consequences, at least in part, of geopolitical risks in the Middle East have boosted demand for gold.
After Powell's speech, markets were more confident that rate cuts would begin in September, providing “A new boost to the hypothesis of a 50 basis point cut“which pushed the dollar close to its lowest levels in more than a year, XS.com senior market analyst Samer Hasn told Dow Jones.
The ICE US Dollar Index fell to 100.53 on Monday, providing support to dollar-denominated gold prices.
Comex gold expiring next month (XAUUSD:CUR) for August delivery closed +0.3% at $2,517.70/oz, a new record, while silver due in August (XAGUSD:CUR) closed +0.6% At $29,977 an ounce, its best closing price since July 18, gold has gained 22% and silver has risen more than 25% so far this year.
ETF: (NYSERCA:GLD), (NYSERCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ)
Citigroup analysts said they expect ETF inflows are expanding “significantly” over the next 6-12 months, with demand driven by looser monetary policy and a possible increase in volatility amid recession risks.
Gold could hit $3,000 by mid-2025, the bank said in a note ahead of Powell's speech.
The market can expect large ETF flows as well as continued speculative demand when the Fed actually makes its first rate cut, UBS analysts said, according to Bloomberg, forecasting prices of $2,600 by the fourth quarter of this year.
