Gold Prices Rise on Middle East Tensions and US Interest Rate Optimism
Gold prices climbed on Thursday, fueled by escalating tensions in the Middle East and optimism about a potential US interest rate cut. Traders awaited economic data for clues on the Federal Reserve‘s future policy direction.
Spot gold rose 0.3% to $2,389.42 an ounce by 03:31 GMT. US gold futures dipped slightly, down 0.2% to $2,428.40, according to Reuters.
Market analysts attributed the price increase to several factors. Kelvin Wong, senior market analyst at OANDA, highlighted the supportive influence of geopolitical tensions in the Middle East and the downward trajectory of US Treasury yields.
The downward trend in Treasury yields makes gold, which offers no interest, more attractive as an investment. Additionally, the US dollar weakened, further boosting the appeal of gold.
Several major brokerage firms, including JPMorgan, Citigroup, and Wells Fargo, have predicted a 50 basis point rate cut by the Federal Reserve in September, following the surprisingly weak US jobs report for July.
Market attention will be focused on several key economic releases later in the day, including US initial jobless claims data. Additionally, Richmond Federal Reserve President Tom Barkin is scheduled to speak.
Analysts remain optimistic about the long-term prospects of gold, with some predicting a price range of $2,350 to $2,500 for the remainder of the year.
Other precious metals also saw gains. Silver climbed 1%, platinum rose 0.1%, and palladium gained 1.2%.
On Wednesday, Impala Platinum reported a $1 billion loss due to declining asset values amidst falling metal prices.