Gold Prices Hold Above $2,500/oz

• Gold prices slightly declined on Monday but remained above the psychologically important level of $2,500 per ounce, following a new all-time high near $2,510/oz reached late last week.
• Spot gold was at $2,501.03/oz at 7:58 AM CET, down 0.3% from Friday’s close of $2,509.65/oz. September gold futures saw a slight increase of 0.1% to $2,539.80/oz.
• The surge in gold prices is driven by market expectations that the U.S. Federal Reserve will cut interest rates at its next meeting in September, along with ongoing geopolitical tensions.
• Since the beginning of the year, gold prices have risen by more than 20%.
• Last week, positive U.S. economic data, including a moderation in inflation and the strongest retail sales growth in 1.5 years, increased confidence in the U.S. economy, contributing to the optimism for a rate cut by the Fed.
• Markets are now focused on the extent of the anticipated rate cut, with a 25 basis point reduction being the most likely scenario, with a 75.5% probability.

New York, August 19 (FFN) – Gold prices held steady above the $2,500 per ounce mark on Monday, despite a slight decline, following a new record high near $2,510/oz reached late last week. This rise in gold prices has been supported primarily by expectations of an interest rate cut by the U.S. Federal Reserve next month, as well as ongoing geopolitical tensions.

As of 7:58 AM CET, the spot price of gold was $2,501.03 per ounce, representing a 0.3% drop from Friday’s close of $2,509.65 per ounce. Meanwhile, September gold futures edged up by 0.1% to $2,539.80 per ounce.

The upward momentum in gold prices is largely attributed to market speculation that the Fed will lower interest rates at its September meeting. Gold, often considered a safe haven asset, has also been buoyed by persistent geopolitical uncertainties. Since the start of the year, gold prices have climbed by more than 20%.

Recent U.S. economic data has bolstered confidence in the world’s largest economy. July’s inflation rate eased, and retail sales posted their strongest growth in 1.5 years. Additionally, the U.S. labor market data, including the number of new unemployment claims, showed improvement.

As a result, markets are increasingly optimistic about a potential rate cut by the Fed. The focus has shifted from whether the Fed will cut rates to the extent of the cut, with the most anticipated reduction being 25 basis points, a scenario that now has a 75.5% probability.

(1 EUR = 1.0994 USD)

Overview of Gold Prices and Market Expectations