Can gold prices surge to new all-time highs by year end?
Gold increases 21% so far this year
US data and geopolitical tensions are driving gold
Bigger picture remains strongly positive
Gold has been performing remarkably well so far this year, with a gain of 21% and a record high of $2,531 on August 20. The impending release of US economic data, increased geopolitical tensions, and hints of nearing rate cuts from the Federal Reserve are the main driving forces behind this rise. When interest rates are low, noninterest-bearing gold is generally more appealing to investors.
![](https://www.xm.com/wp-content/uploads/2024/09/Goldvsothers.png)
Gold prices have been fluctuating within a restricted range over the last few days. Investors are primarily anticipating the first interest rate cut on September 18, with markets fully pricing in a 25-basis point reduction. This had contributed to the subdued volatility until worries about a slowdown in the US prompted investors to price in around a 40% probability of a larger 50-bps cut. Nevertheless, volatility might remain somewhat muted for bullion until investors can determine the Fed's potential future course.
Gold gains support from a dovish PowellFed Chair Powell's recent speech at the Jackson Hole symposium has had a significant impact on the recent increase in gold prices. Powell suggested that the Federal Reserve may reduce interest rates in the near future due to indications of a weakening labor market. This dovish posture has resulted in a decrease in US government bond yields, which has increased the appeal of non-yielding assets such as gold.
![](https://www.xm.com/wp-content/uploads/2024/09/Fed-funds-rate.png)
The expected interest rate cuts by the Federal Reserve in late 2024 could devalue the US dollar, thereby increasing the appeal of gold. But the previous metal is also benefiting from the uncertainty about the economic outlook. Although inflation is slowing down, it is still a worry for Fed policymakers. Moreover, economic data, including GDP growth and job numbers, are presenting conflicting signals, adding to gold’s appeal as a steady investment.
Geopolitical tensionsAlong with the Fed's change in policy, rising global tensions, especially in the Middle East, have also helped push gold prices up. The ongoing conflicts have made things less certain, which is why investors are buying safe assets like gold. Important geopolitical factors, such as the deteriorating situation between Israel and Hezbollah and the increased likelihood of a larger regional war, have led investors to seek safety in gold as the world becomes less stable.
On Monday, President Joe Biden claimed that Israeli Prime Minister Benjamin Netanyahu was not acting sufficiently to negotiate a deal for the release of hostages kept in Gaza by Hamas, and that the US was almost ready to offer a last offer to negotiators working on a hostage and peace accord.
China plays crucial role on precious metalThe Chinese economy has had a major impact on the price of gold in 2024. The People's Bank of China resumed gold buying after a temporary break, greatly boosting gold demand. The Chinese government, as well as the public, are looking to gold as a hedge against economic uncertainty due to factors including the yuan's depreciation and persistent problems in the real estate sector.
The country's desire to diversify its currency portfolio and protect itself from geopolitical uncertainties has intensified its gold purchases. As a result, China's moves have been crucial in propelling gold prices around the world to record highs, and experts expect that this trend will likely continue all year.
Technical picture remains bullishDespite the latest pullback over the last few days, the precious metal remains strongly positive above the long-term ascending trend line. A rebound on the latter line may drive the market again towards the record peak of $2,531.66 before testing the next round numbers, such as $2,600 and $2,700. The downward wave from $2,070 to $1,616 has drawn the Fibonacci extension mark of $2,800, which appears to be a challenging level.
Alternatively, a drop beneath the 200-day simple moving average (SMA) at $2,240 could switch the outlook to bearish.
![](https://www.xm.com/wp-content/uploads/2024/09/GOLDDaily-1024x559.png)
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.