Gold Prices Surge to Record High
On Tuesday, gold prices reached a record high due to increasing expectations of US rate cuts in September and new import quotas issued by the People’s Bank of China, according to a report by ShareCast.
Spot gold jumped above $2,525 an ounce earlier in the day, surpassing Friday’s record high.
Insight on Chinese Market Influence
John Meyer, partner and head of research at SP Angel, mentioned that Chinese exporters and traders have been rushing to buy yuan and possibly gold “in anticipation of further US dollar weakness.”
Furthermore, the yellow metal has been supported by Chinese buying following the PBoC’s crackdown on local government bond purchases, added Meyer.
Anticipation of Rate Cuts
Meyer also highlighted that investors are eagerly anticipating comments from the Jackson Hole meeting, where Federal Reserve governors are expected to discuss the potential for rate easing starting from September.
He noted, “Traders are loading up on gold and bonds in advance of the Jackson Hole symposium,” indicating the market sentiment towards potential rate cuts.
Some economists are even speculating that chair Jerome Powell might suggest a 50 basis points cut, with possible cuts of 200-250bp throughout the year if non-farm payrolls data reveals further weakness.
Source: News.Az
