Persistent geopolitical uncertainty and signs of a possible decrease in interest rates by the Federal Reserve continue to drive gold’s appeal as a store of value.
The market of gold experiences a brief respite this Wednesday after having reached another historic milestone, amid growing tensions in the Middle East and expectations of a possible interest rate cut in the United States.
Thus, the spot gold price fell 0.4%, standing at $2,271.50 per ounce, after having reached an unprecedented high of $2,288.09 during the previous session. This slight decline is partly attributed to the rebound in US Treasury yields.
Meanwhile, US gold futures rose 0.5% to $2,292, indicating continued investor interest in this safe haven asset. Persistent geopolitical uncertainty and signs of a possible decrease in interest rates by the Federal Reserve continue to drive gold’s appeal as a store of value.
Demand for safe haven assets
Robust demand for the precious metal from central banks and safety-seeking investors has contributed to a nearly 10% rise in the price of gold so far this year, showing its strength as an investment asset in times turbulent.
gold
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Alexander Zumpfe, precious metals trader at Heraeus, says: “It seems as if gold turns every market event into a price rise,” highlighting investors’ perception of its value as a safe haven in times of volatility.
Expectations of a rate cut in the United States are fueled by comments from several Federal Reserve authorities, which suggest the possibility of up to three reductions over the course of the year. Although some recent economic indicators show strengthdoubts persist about the sustainability of growth, reinforcing the perception that the Federal Reserve could act to stimulate the economy.
In the outlook for other precious metals, silver experienced an increase of 0.5%, trading at $26.24 per ounce; platinum remains stable at $918.74; while palladium registered a fall of 1.1%, standing at $992.32. These fluctuations reflect the complex dynamics of precious metals markets amid ever-changing global economic and geopolitical conditions.
Source: Ambito
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