Gold prices shine on US rate-cut optimism
Shafaq News/Gold prices rose on Thursday, trading not too far away from a record highscaled in the previous session, as rising anticipation of a U.S. interest ratecut in September lifted demand for non-yielding bullion.
Spot goldwas up 0.4% at $2,467.48 per ounce, as of 0218 GMT. Prices hit an all-time highof $2,483.60 on Wednesday. U.S. gold futures also climbed 0.4% to $2,469.90.
Decreasingrates and U.S. elections are two immediate factors likely to push gold beyond$2,500, as gold tends to benefit from economic and geopolitical uncertainty,said Ryan McIntyre, senior portfolio manager at Sprott Asset Management.
"Holdingsof gold in ETFs (exchange traded funds) appear to have bottomed in May and theyare now starting to increase again ... there could be a new wave of demand forgold coming through this channel particularly with financial advisers andinstitutions."
Lower interestrates increase the appeal of non-yielding bullion.
Fed GovernorChristopher Waller and New York Fed President John Williams both noted theshortening horizon toward looser monetary policy. Separately, Richmond FedPresident Thomas Barkin said he is "very encouraged" on broadeningdeclines in inflation.
Marketsexpect a 25-basis-point reduction at the Federal Reserve's September meeting,according to CME's FedWatch Tool.
U.S.economic activity expanded at a slight-to-modest pace from late May throughearly July, with firms expecting slower growth ahead, a Fed survey showed.
"Overthe next 6-12 months, regardless of who wins the (U.S.) election, we see goldrising to $2,700-$3,000 and silver to $38," Citi Research said.
Investorsmay want to hedge their equity and currency exposures as potential global tradewar looms, especially between the U.S. and China, which could boost preciousmetals, it added.
Spot silverrose 0.4% to $30.40, platinum firmed 0.6% at $1,000 and palladium gained 0.6%to $957.31.
(Reuters)
