Expectations of interest rate cuts and political uncertainty in the United States are boosting gold prices, creating conditions for it to reach a new all-time high before the end of 2024.
Gold prices strengthen on Monday as the dollar weakened after the announcement that the US president, Joe Bidenwill not participate in the 2024 presidential race.
Spot gold prices rose 0.2% to $2,405.40 an ounce, while US futures rose 0.3% to $2,407.20.
And the expectation of interest rate cuts and political uncertainty in the United States are driving up gold prices, creating conditions for it to reach a new all-time high before the end of 2024according to Kyle Rodda, financial markets analyst at Capital.com.
The dollar initially weakened after Biden’s withdrawal, making bullion more attractive to buyers with other currencies. This move clears the way for another Democrat to challenge Donald Trumpwho, in accepting the Republican nomination on Thursday, reiterated his promise to cut corporate taxes and interest rates. Analysts also anticipate that a Trump presidency would tighten trade relations, which could result in inflationary tariffs.
Gold, dollar and 2024 elections
“I believe there is an almost unstoppable process of decoupling between the United States and China, which will only worsen or accelerate with a Trump presidency. Gold to benefit from heightened geopolitical tensions“Rodda said. Prices hit an all-time high of $2,483.60 last week on rising odds of U.S. interest rate cuts, with a 97% probability in September according to CME’s FedWatch tool.
Kamala Harris vs. Trump.jpg
This week, attention will be on the US personal consumption expenditure (PCE) data on Friday, as well as other data, as the preliminary S&P Global July PMIssecond quarter GDP growth and weekly unemployment benefit claims.
Among other metals, spot silver fell 0.5% to $29.11 an ounce, platinum fell 0.3% to $959.99, while palladium rose 1.1% to $916.18.
Source: Ambito
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