The recent strong performance of gold futures prices has undoubtedly become a major focus of the financial market. According to the Wisdom Finance app, the weakening of the US dollar and market expectations of a possible interest rate cut by the Federal Reserve have jointly pushed up the price of gold. Last Friday, spot gold prices rose to a new high of $2,500/ounce, making the price of a gold bar weighing about 400 ounces exceed $1 million. In the global precious metal trading center in London, the standard weight of a gold bar is usually 400 troy ounces, but the pure gold content can fluctuate between 350 and 430 ounces. In addition, there are smaller and cheaper gold bars available in the market for individual investors to choose from, such as those sold by Costco (COST.US). According to data from Metals Focus, global central banks purchased a net 483.3 tons of gold in the first half of 2024, equivalent to nearly 40,000 gold bars. This purchase, together with the expected loose monetary policy of the Federal Reserve, has become an important factor supporting the strong rise in gold prices. SP Angel analysts pointed out that the weakening of the US dollar and the decline in US Treasury bond yields were the main reasons for the sharp rise and high holding of gold prices last Friday afternoon. At the same time, regional banks were encouraged to invest in the real economy rather than in bonds, which also prompted Chinese buyers to turn to gold as a safe-haven asset. With the Fed meeting approaching, the market generally expects gold prices to continue to rise, with some analysts even predicting that gold prices will reach $3,000/ounce next year. However, David Meger of High Ridge Futures reminded that if the Fed only suggested a 0.25% interest rate cut without indicating a larger cut, the market may feel disappointed. Naeem Aslam, chief investment officer of Zaye Capital Markets, also pointed out that the rapid rise in gold prices has reached a level that has many traders apprehensive. He emphasized that if Fed Chairman Jerome Powell does not explicitly indicate the possibility of further interest rate cuts, gold may face selling pressure. Sabrin Chowdhury, head of BMI's commodity analysis, expects gold prices to reach multiple highs in 2024, especially against the backdrop of the US election, the Russia-Ukraine conflict, and the Middle East tension, making gold as a safe-haven more attractive. She further pointed out that once the Fed began to cut interest rates, the price of gold could reach $2,700/ounce. Analysts at Citigroup are also optimistic about the gold market, expecting investor confidence to rise in the next three to six months, and predicting a target price of $3,000/ounce by mid-2025, with an average forecast price of $2,550/ounce in the fourth quarter. This week, traders will closely monitor the annual economic policy symposium in Jackson Hole, where Fed Chairman Powell's speech may provide more clues about interest rate prospects. The most active Comex gold December delivery contract closed up 0.1% on Monday, at $2,541.30/ounce, setting a new historical high. Meanwhile, August Comex gold and silver also set their respective historical highs.
According to the Wisdom Finance app, the recent strong performance of gold futures prices has undoubtedly become a major focus of the financial market. The weakening of the US dollar and market expectations of a possible interest rate cut by the Federal Reserve have jointly pushed up the price of gold. Last Friday, spot gold prices rose to a new high of $2,500/ounce, making the price of a gold bar weighing about 400 ounces exceed $1 million.
In the global precious metal trading center in London, the standard weight of a gold bar is usually 400 troy ounces, but the pure gold content can fluctuate between 350 and 430 ounces. In addition, there are smaller and cheaper gold bars available in the market for individual investors to choose from, such as those sold by Costco (COST.US).
According to data from Metals Focus, global central banks purchased a net 483.3 tons of gold in the first half of 2024, equivalent to nearly 40,000 gold bars. This purchase, together with the expected loose monetary policy of the Federal Reserve, has become an important factor supporting the strong rise in gold prices.
SP Angel analysts pointed out that the weakening of the US dollar and the decline in US Treasury bond yields were the main reasons for the sharp rise and high holding of gold prices last Friday afternoon. At the same time, regional banks were encouraged to invest in the real economy rather than in bonds, which also prompted Chinese buyers to turn to gold as a safe-haven asset.
With the Fed meeting approaching, the market generally expects gold prices to continue to rise, with some analysts even predicting that gold prices will reach $3,000/ounce next year. However, David Meger of High Ridge Futures reminded that if the Fed only suggested a 0.25% interest rate cut without indicating a larger cut, the market may feel disappointed.
Naeem Aslam, chief investment officer of Zaye Capital Markets, also pointed out that the rapid rise in gold prices has reached a level that has many traders apprehensive. He emphasized that if Fed Chairman Jerome Powell does not explicitly indicate the possibility of further interest rate cuts, gold may face selling pressure.
Sabrin Chowdhury, head of BMI's commodity analysis, expects gold prices to reach multiple highs in 2024, especially against the backdrop of the US election, the Russia-Ukraine conflict, and the Middle East tension, making gold as a safe-haven more attractive. She further pointed out that once the Fed began to cut interest rates, the price of gold could reach $2,700/ounce.
Analysts at Citigroup are also optimistic about the gold market, expecting investor confidence to rise in the next three to six months, and predicting a target price of $3,000/ounce by mid-2025, with an average forecast price of $2,550/ounce in the fourth quarter.
This week, traders will closely monitor the annual economic policy symposium in Jackson Hole, where Fed Chairman Powell's speech may provide more clues about interest rate prospects. The most active Comex gold December delivery contract closed up 0.1% on Monday, at $2,541.30/ounce, setting a new historical high. Meanwhile, August Comex gold and silver also set their respective historical highs.
For investors, gold ETFs such as the SPDR Gold Trust (GLD.US), the VanEck gold mining ETF (GDX.US), the Small Gold Mining ETF (GDXJ.US), and the Gold Trust ETF (IAU.US) provide a diversified investment choice to capture the upside potential of the gold market.