Gold prices reached an unprecedented high on Friday, fueled by a weakening dollar and escalating tensions in the Middle East. The anticipation of an interest rate cut from the Federal Reserve in September further boosted the demand for bullion.
Spot gold surged by 1.3% to $2,489.12 per ounce by 11:08 a.m. EDT (1508 GMT), with a peak of $2,500.99. Meanwhile, U.S. gold futures climbed by 1.4% to $2,527.80, marking a 2.4% increase for the week.
The drop in the dollar index by 0.3% signaled its fourth consecutive week of decline, making gold more attractive for international buyers.
“Gold has surged to an all-time high and surpassed the $2,500 mark after weeks of volatile trading, demonstrating the dominance of bullish sentiment,” remarked Tai Wong, an independent metals trader based in New York.
Market attention now turns to Jackson Hole and Fed Chair Powell’s forthcoming speech, offering a comprehensive insight into the upcoming rate adjustments.
Federal Reserve Chair Jerome Powell is scheduled to present the economic outlook next Friday, coinciding with the commencement of the annual economic symposium hosted by the Kansas City Fed.
The recent release of the producer and consumer price indices in July indicated a decline in inflation, positioning the Fed for a potential 25-basis-point rate cut next month.
Fed Bank of Chicago President Austan Goolsbee emphasized the absence of overheating in the U.S. economy, cautioning against the persistence of restrictive policies.
“Ongoing geopolitical tensions, the potential for escalation involving Iran, and the conflict in Ukraine are all factors contributing to the heightened safe-haven demand for gold,” explained Everett Millman, chief market analyst with Gainesville Coins.
Bullion is widely regarded as a safeguard against geopolitical and economic uncertainties, thriving particularly in a low-interest-rate environment.
While silver experienced a slight decline to $28.35 per ounce and platinum dropped by 1% to $943.10, palladium also decreased by 0.9% to $935.43.
All precious metals were poised for weekly gains, signaling a positive trajectory in the market.
