Gold Trades At Record High

last updated on

Gold Trades At Record High

Gold (Xau/Usd) Trades At Record High New $2470

Gold (XAU/USD) prices reached record highs on Wednesday as the optimism for a rate cut in September continues to grow. This optimism is rejoiced by the Gold (XAU/USD) traders, which have further extended their recent gains and reached the price level of $2470.

Over all, a 0.2% gain was seen in the spot Gold prices, which has pushed them near the $2478/ounce. Similarly, Gold futures (August) are trading at $2483.65 per ounce and are also sitting at record highs.

Disinflation Trend Supports Higher Gold Prices

The bottom line is that gold prices are supported by the expectation of rate cuts. If the US Federal Reserve delivers a rate cut in September and then one more in December, it will send the Gold (XAU/USD) to new rights. In fact, some analysts are also citing a target of $3000 as a high possibility if the rate cut promise is delivered.

In the USA, CPI data continues to show progress towards the disinflation efforts. This has also made the Federal Reserve switch its stance from hawkish to dovish and start thinking about a rate cut at the September meeting.

As of right now, the probability of a September rate cut is already above 90%. According to the CME Fed watch tool, the rate cut will be around 25 bps with a 90% chance.

However, there's also a small possibility that the Fed may deliver a 50 bps rate cut. So, as far as the chances of maintaining the interest rate are concerned, no one is even thinking about it anymore.

The recently released retail sales data in the USA has confirmed that the US economy is cooling down, and the Federal Reserve needs to hurry. If the US Federal Reserve delays the rate cuts any longer, it will have serious implications on the labor market and the economy itself.

Generally, lower rates are good for Gold, Silver, and other precious metals as it makes them a better option against the fiat currencies.

Trending Stories