Spot
gold was up 0.7% at $4,011.18 per ounce by 0300 GMT. U.S. gold futures
for December delivery gained 0.7% to $4,033.40 per ounce.
Traditionally, gold is seen as a store of value during times of
instability. Spot gold is up 53% year-to-date after rising 27% in 2024.
"There's
so much faith in this trade right now that the market will look for the
next big round number which is 5,000 with the Fed likely to continue to
lower rates," said Tai Wong, an independent metals trader.
"There
will be some bumps in the road like a lasting truce in the Mideast or
Ukraine but the fundamental drivers of the trade, massive and growing
debt, reserve diversification, and a weaker dollar are unlikely to
change in the medium term."
The
metal's rally has been driven by a cocktail of factors, including
expectations of interest rate cuts, ongoing political and economic
uncertainty, solid central bank buying, inflows into gold
exchange-traded funds and a weak dollar.
The
U.S. government shutdown entered its seventh day on Tuesday. The
shutdown has postponed the release of key economic indicators from the
world's biggest economy, forcing investors to rely on secondary, non-government data to gauge the timing and extent of Fed rate cuts.
Investors
are now pricing in a 25-basis-point cut at the Fed meeting this month,
with an additional 25-bp cut anticipated in December.
"Rising
uncertainty levels tend to fuel gains in the gold price and we are
seeing this theme play out again," said KCM Trade Chief Market Analyst
Tim Waterer.
"Market
dynamics of lower U.S. interest rates and the ongoing government
shutdown are still working in favour of gold. But the temptation to take
profits around the $4,000 mark pose a potential short-term risk."
A "fear of missing out" is also boosting the rally, analysts say.
Additionally, political turmoil in France and Japan has also boosted demand for the safe-haven bullion.
"The
latest leg higher has been sparked by the election of Sanae Takaichi
over the weekend and the prospect of deeper deficit spending in Japan.
That itself ties into a key theme at the moment: the 'run it hot'
trade," said Capital.com analyst Kyle Rodda.
Analysts
expect strong inflows into exchange-traded funds backed by physical
gold, central bank buying and the prospect of lower U.S. interest rates
to support gold prices in 2026, prompting Goldman Sachs and UBS to raise their price outlooks.
In
other precious metals markets, spot silver rose 1.3% to $48.42 per
ounce, platinum gained 2.5% to $1,658.40 and palladium climbed 1.8% to
$1,361.89.
Reporting by Anushree Mukherjee, Brijesh Patel and Anmol Choubey in Bengaluru; Editing by Sriraj Kalluvila and Christian Schmollinger
Our Standards: The Thomson Reuters Trust Principles.
Δεν υπάρχουν σχόλια :
Δημοσίευση σχολίου