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Gold prices soar to record highs as investors anticipate rate cuts: Gold prices had a record run this week, driven by expectations of an incoming interest rate cut from the US Federal Reserve in September, as well as a weakening USD, Reuters reports.
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Gold prices have been on the up for a while now, with Comex gold futures now clocking in at USD 2,547.50 per troy ounce, with prices up 25.2% over the last six months. It’s a similar story for gold spot prices, which are up 24.1% over a half a year period. Holdings of gold-backed exchange-traded funds (ETFs) have also risen by some USD 7.3 bn since May, the Financial Times reports, citing data from the World Gold Council.
“The primary drivers of the gold price move are financial investment demand, particularly with ETF buying improving and overall improved sentiment as the expectations of Fed easing cycle to begin in September,” Citi Research’s Aakash Doshi told Reuters. Doshi also expects gold to reach USD 3k per ounce by mid-2025 and USD 2.6k by the end of this year.
Remember: US inflation fell below 3% in July for the first time since March 2021, strengthening the case for the Fed to cut interest rates at its next meeting in September. Markets are pricing in a 64.5% chance of the Fed cutting interest rates by 25 basis points, according to the CME FedWatch Tool.
MARKETS THIS MORNING-
Asian markets are mostly in the green during early trading this morning as traders price in recently released minutes from a US Federal Reserve meeting that raised hopes of an approaching rate cut. The Nikkei is up 1.0% and the Hang Seng has advanced 0.4%, while the Shanghai is currently down 0.1% at the time of writing.
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ADX |
9,348 |
+0.3% (YTD: -2.4%) |
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DFM |
4,295 |
+0.9% (YTD: +5.8%) |
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Nasdaq Dubai UAE20 |
3733 |
+0.5% (YTD: -2.8%) |
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USD : AED CBUAE |
Buy 3.67 |
Sell 3.67 |
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EIBOR |
4.9% o/n |
4.6% 1 yr |
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TASI |
12,187 |
+0.7% (YTD: +1.8%) |
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EGX30 |
29,914 |
0.0% (YTD: +20.2%) |
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S&P 500 |
6,621 |
+0.4% (YTD: +17.8%) |
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FTSE 100 |
8,283 |
+0.1% (YTD: +10.2%) |
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Euro Stoxx 50 |
4,885 |
+0.6% (YTD: +8.1%) |
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Brent crude |
USD 76.05 |
-1.5% |
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Natural gas (Nymex) |
USD 2.19 |
+0.1% |
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Gold |
USD 2,547.50 |
-0.1% |
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BTC |
USD 61,042.00 |
+2.9% (YTD: +44.4%) |
THE CLOSING BELL-
The ADX rose 0.3% yesterday on turnover of AED 1.35 bn. The index is down 2.4% YTD.
In the green: Foodco National Foodstuff (+4.2%), Abu Dhabi National Building Materials Co. (+3.9%) and Apex Investment (+3.7%).
In the red: Gulf Medical Projects Company (-9.6%), Gulf Cement Co. (-7.4%) and Al Khaleej Investment (-3.9%).
Over on the DFM, the index rose 0.9% on turnover of 429.1 mn. Meanwhile, Nasdaq Dubai fell 2,8%.
