Gold prices pushed up to as high as $1,988 an ounce Thursday, adding to gains seen earlier in the week.
The last few days have seen a bullish mood for the precious metal after US inflation figures came in lower than the market had expected, slashing the chances that the US Fed will push interest rates any higher than the current 5.25-5.5%. The fresh gains compared with a low of $1,957 an ounce seen Wednesday.
Monetary tightening has been a clear bearish force for gold prices. Looking at the longer-term charts shows that gold prices had been posting successive lower lows since April 2023 as central banks continued to raise interest rates, making the yellow metal less attractive as a non-yield bearing asset.
That all changed with the outbreak of conflict in Palestine and Israel which started on October 7th which reintroduced a risk premium to the market, lifting prices back up to around $1,930 to $2,000 an ounce since late October.
Looking ahead, Friday will see a speech by ECB President Christine Lagarde which may provide indicators on the health of the Euro Area economy, and the outlook for interest rates, which the bank kept on hold at multi-year highs of 4.5% at its October meeting, after a 15-month long series of hikes. Figures on the Euro Area year-on-year inflation rate are also set for release later Friday morning.
Carlo is an external market analyst for Kinesis Money. With a credential background in Economic Finance and International Exchange (MA), Carlo’s critical analysis of gold and silver markets’ performance is frequently quoted by leading publications such as Forbes, Reuters, CNBC, and Nasdaq.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
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