Gold prices stayed steady during early Asian trading as investors wait for important US economic data and clues about the Federal Reserve’s next move on interest rates. A possible rate cut in November and ongoing tensions in the Middle East are helping boost gold’s appeal as a safe investment. Experts also predict gold could hit new record highs over the next year, driven by both economic uncertainty and geopolitical risks.
Gold prices maintained stability during the early hours of Wednesday’s Asian trading session, with spot gold trading at USD 2,660.36 per ounce as of 00:36 GMT.
Traders are keeping an eye on critical US economic indicators, including retail sales and industrial production data, as they seek clues on the Federal Reserve’s future direction regarding interest rates.
A recent survey of the bullion sector indicates that gold is likely to reach new all-time highs within the next year. Currently, markets are pricing in a 97.2% likelihood of a 25-basis-point rate cut in November, which could increase gold’s appeal as a non-interest-bearing asset.
A key observation here is the consolidation of gold around USD 2,663.64, supported by a strengthening MACD signal that suggests a possible upward move.
If gold breaches USD 2,668.91, it could pave the way for further gains towards USD 2,675, while USD 2,650.75 serves as a critical support level.
Prices have been fluctuating within a range between USD 2,658.70 and USD 2,665.16, signalling a consolidation phase with mild bullish momentum.
Additionally, the US dollar’s volatility and mixed inflation data have driven investors towards gold as a hedge against market uncertainty.
Investors are also monitoring upcoming Federal Reserve meetings for additional clues about future rate adjustments, which could further influence gold prices.
Traders are anticipating the release of the US retail sales report on Thursday, which could shape expectations for Fed policy, alongside industrial production figures and weekly jobless claims.
San Francisco Fed President Mary Daly has reiterated the possibility of more rate cuts, while Atlanta Fed President Raphael Bostic has suggested that only one more 25-basis-point reduction is likely this year.
If upcoming economic data meets expectations, it may confirm the anticipated rate cut, which could further support gold prices.
In addition to economic factors, traders are closely monitoring the ongoing Israel-Hamas conflict. Israeli Prime Minister Benjamin Netanyahu recently informed French President Emmanuel Macron that Israel would not accept any ceasefire that allows Hezbollah to strengthen its position.
The sustained geopolitical tensions add to gold’s safe-haven appeal, with prices potentially benefiting further if the conflict escalates.
At the London Bullion Market Association (LBMA) conference in Miami, delegates projected that gold prices could rise to USD 2,941 per ounce over the next 12 months, reflecting widespread optimism for precious metals.
As markets await further clarity on the US economy, currency trends, and geopolitical developments, precious metals, including gold, remain highly sensitive to shifts in economic and political risk factors.
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