Gold prices have hit a new record high
Specifically, according to Fxstreet, the price of gold reached a new record high - an all-time high during the September 24 trading session in the US. This, along with a decline in US Treasury yields and a weakening greenback, has boosted the price of this non-yielding metal. The exchange rate of gold against the USD (XAU/USD) traded at $2,662 after reaching $2,664.
US consumer confidence declined in September, hitting its lowest level since August 2021, due to growing concerns about the labor market and the overall economic outlook.
Following the data, U.S. Treasury yields edged lower, with the benchmark 10-year yielding 3.73%, down two basis points. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback's performance against a basket of six currencies, fell to a two-day low of 100.48, down more than 0.42%.
Meanwhile, Fed Governor Michelle Bowman, a notorious "hawk", has stated that inflation risks remain significant, expressing a preference for a "moderate pace of cuts" to prevent the risk of inflation returning.
Market watchers are also almost certain that the Fed will cut rates by 0.25% at its November meeting, while the odds for a 50 basis point cut are 56.2%, according to the CME FedWatch Tool.
In related developments, the XAU/USD index is trending higher, although the rally appears to have been overextended, with traders eyeing $2,700 an ounce. Momentum favors buyers, although the Relative Strength Index (RSI) has moved into overbought territory. Therefore, buyers should be wary of a possible pullback, Fx quoted experts as saying.
If the XAU/USD index extends its rally, traders could test the $2,675 level, followed by $2,700. This would be followed by $2,750 and $2,800.
Even as the economy changes, the gold rush shows no signs of slowing down. Recent developments, such as cooling inflation and the possibility of interest rate cuts, could boost the value of the precious metal in the coming months.
How high will gold prices go this October?
Experts are generally bullish on gold in October, but specific price predictions vary. With gold already trading above $2,500 an ounce, the question is whether it will continue to rise or stabilize.
Kenny Zhu, earnings research analyst at Global X ETFs, highlighted the wide range of forecasts. “We have seen bullish predictions ranging from $2,600 to $3,000 an ounce, while bearish estimates have been as low as $2,000 in the medium term,” he said. This disparity underscores the complex factors influencing gold prices.
Alex Ebkarian, CEO and co-founder of precious metals trading firm Allegiance Gold, is bullish. He believes gold could rise to $2,600, especially if interest rates fall. He explains that when interest rates are lower, “gold tends to become [preferred] to bonds.”
Factors influencing gold price forecasts, according to experts, could be a combination of economic, political and global factors. First is geopolitics: Ongoing conflicts and global tensions increase the appeal of gold as a safe-haven asset.
Next is inflation and monetary policy: Gold acts as a hedge against inflation, with its value influenced by the Fed. Then there is the strength of the US dollar: a weaker greenback makes gold more attractive to foreign investors.
There’s also central bank activity: Large-scale purchases of gold by national banks, especially in emerging markets, create demand. And there’s the risk of a recession and job market: Economic uncertainty can drive investors toward alternative assets like gold. Rising gold prices can be a sign of a struggling economy.
On the other hand, the upcoming US presidential election could lead to policy changes that affect financial markets. These factors interact in complex ways, creating a dynamic environment for gold prices.
In addition, the market has largely adjusted to recent economic fluctuations, potentially setting the stage for gold to rally in October.
Source: https://doanhnghiepvn.vn/kinh-te/du-bao-gia-vang-co-the-tang-soc-trong-thang-10/20240926083256557
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