By Polina Devitt
Factors Driving Record High Gold Prices
LONDON – Spot gold prices hit a record high on Friday as a weak dollar, expectations of more U.S. interest rate cuts, and tensions in the Middle East more than offset muted physical demand in Asia.
Spot gold was up 1.2% at $2,617.60 per ounce by 1223 GMT after hitting a record high of $2,617.89. U.S. gold futures rose 1.1% to $2,643.
Gold is up 27% so far this year, driven by factors such as the weakening dollar, economic uncertainties, and geopolitical risks. The recent start of the Federal Reserve’s easing cycle further boosted gold prices.
Expert Insights and Price Predictions
“We expect further dollar depreciation, as the Fed catches up with other central banks who started their cutting cycles earlier. That should be gold price positive,” said WisdomTree commodity strategist Nitesh Shah.
Shah predicts that gold could potentially reach $3,000 per ounce within a year due to ongoing geopolitical risks and investors looking to hedge against a slowing economy.
Technical Analysis and Market Trends
Despite the bullish sentiment, gold’s Relative Strength Index moved into “overbought” territory on Friday, indicating potential price corrections in the near future.
Independent analyst Ross Norman pointed out that gold’s recent price movements have been largely influenced by its inverse relationship with the US dollar and treasury yields.
Norman believes that the momentum is supportive of further price increases in gold, even though it may currently be overbought according to technical indicators.
Market Behavior and Physical Demand
While demand from the physical sector in Asia remains subdued, with gold trading at a discount to the London price, market dynamics are being driven more by geopolitical tensions and macroeconomic factors.
Chinese demand, a key driver for the gold market, showed a significant decline as no gold was imported from Switzerland in August, indicating a shift in trading patterns in the region.
In other metals, silver gained 2.0% to $31.39, platinum rose 0.5% to $993.85, and palladium remained steady at $1,080.75.
This article was generated from an automated news agency feed without modifications to text.
