Gold hits record high again on Thursday

Gold prices rose on Thursday, nearing the recent record high. The increase is driven by expectations of a US Federal Reserve interest rate cut in September, boosting demand for the non-yielding asset.

Spot gold rose 0.4 per cent to $2,467.48 per ounce by 02:18 GMT, inching closer to its all-time high of $2,483.60 set on Wednesday. US gold futures mirrored the trend, gaining 0.4 per cent to $2,469.90.

Gold could surpass $2,500 soon due to lower interest rates and the upcoming US elections, said Ryan McIntyre, a senior portfolio manager at Sprott Asset Management.

Gold holdings in exchange-traded funds (ETFs) seem to have reached a low point in May but are now showing signs of increasing again. This indicates a possible resurgence in demand for gold through this channel.

Recent comments from Federal Reserve officials, including Christopher Waller and John Williams, have reinforced the market’s belief in a shift towards looser monetary policy.

Additionally, Richmond Fed President Thomas Barkin expressed optimism about the ongoing decline in inflation.

Financial markets currently anticipate a 25-basis-point rate cut from the Fed at its September meeting, as indicated by CME’s FedWatch Tool.

A separate survey conducted by the Fed highlighted a moderate expansion in US economic activity between late May and early July, with businesses forecasting slower growth in the coming months.

Citi Research forecasts gold prices to hit $2,700-$3,000 and silver to reach $38 in the next 6-12 months.

In addition to gold, other precious metals also experienced gains. Spot silver rose 0.4 per cent to $30.40 per ounce, while platinum and palladium climbed 0.6 per cent each to $1,000 and $957.31 per ounce, respectively.

Attribution: Reuters