Gold prices slightly dipped on Monday but remained close to the historic $2,500 mark as traders secured profits following bullion’s recent surge to a record high. Spot gold saw a minor decline of 0.2% to $2,503.10 per ounce, while U.S. gold futures experienced a slight rise of 0.2% to $2,541.50.
The anticipation of a potential interest rate cut by the U.S. Federal Reserve in September drove gold to a record $2,509.65 last Friday. This surge, fuelled by increased geopolitical tensions and substantial central bank buying, has propelled gold prices by over 20% this year.
Tim Waterer, chief market analyst at KCM Trade, noted that gold has been eyeing the psychological $2,500 level for months, and now that it’s been achieved, some natural profit-taking is occurring. Recent positive U.S. economic data, including strong retail sales and lower unemployment claims, along with moderate inflation figures, have bolstered confidence in the U.S. economy.
Traders are now almost certain that the Federal Reserve will cut rates next month, with a 75.5% chance of a 25-basis-point reduction. Attention is now turning to Federal Reserve Chair Jerome Powell’s upcoming speech at Jackson Hole on Friday, as traders look for further insights. Additionally, the minutes from the Fed’s July policy meeting, set to be released on Wednesday, are also eagerly awaited.
Kyle Rodda, a financial market analyst at Capital.com, predicted that a slowing U.S. economy, impending rate cuts, lower yields, a weaker dollar, persistent geopolitical risks, and strong central bank demand will continue to push gold prices upward in the long term.
Meanwhile, several Chinese banks have received new gold import quotas from the central bank, anticipating renewed demand despite the high prices. In other markets, spot silver rose by 0.4% to $29.11 per ounce, platinum remained stable at $954.65, and palladium decreased by 0.7% to $944.43.
As traders secure profits, gold prices remain strong near historic levels, with the market eagerly awaiting potential rate cuts and further economic signals from the U.S. Federal Reserve. The ongoing geopolitical tensions and robust demand from central banks suggest that gold could continue its upward trajectory in the long term.
London-listed company KEFI Gold and Copper plc (LON:KEFI) is an exploration and development company focused on gold and copper deposits in the highly prospective Arabian-Nubian Shield. The Company operates in Ethiopia and Saudi Arabia with projects including Tulu Kapi project, Jibal Qutman EL and Hawiah.
