On September 8, the price of gold remained close to record highs, as weak US employment data fueled forecasts that the Federal Reserve could cut the key interest rate as early as this month. This was reported by Reuters, writes UNN.
Details
As of 06:41 GMT, the spot price of gold added 0.2%, reaching $3,593.79 per ounce. On Friday, quotes rose to a record level of $3,599.89, which became a historical high for the market. At the same time, December gold futures in the US fell by 0.5%, trading at $3,634.
Analysts explain that demand for the precious metal increased after the release of US labor market statistics, which turned out to be weaker than forecasts. This fueled expectations that the Fed might begin to ease monetary policy to support economic growth.
Gold is traditionally considered a "safe haven" for investors in times of uncertainty, and a potential reduction in borrowing costs makes this asset even more attractive, as it reduces the alternative costs of holding it.
Financial markets are closely monitoring upcoming speeches by Fed officials, which may signal the regulator's next decision. If expectations of a rate cut are confirmed, analysts do not rule out further strengthening of gold above the symbolic mark of $3,600 per ounce.
The main driver is US employment data and expectations that the Fed could cut the rate by 50 basis points in September. This is a small probability, but a significant shift compared to the data before the employment data was released.
Recall
Despite the previous increase in the value of monetary gold as a method of saving money, its popularity as a jewelry metal has significantly decreased. As noted in a comment for UNN by financial expert Olena Sosedka, this was most reflected in the key markets - India and China.
Gold prices in the global market have become so high that it has reduced the popularity of buying gold jewelry. This was most reflected in such key markets as India and China, but the global decline in demand is felt all over the world. Due to the rising price, former fans of gold jewelry are increasingly preferring other precious metals. Instead, gold is more often considered as a way to preserve capital in conditions of economic instability and high inflation. And not as an item of everyday use
In addition, analysts at Goldman Sachs, one of the largest and most influential investment banks in the world, predict that if the dollar continues to fall, the price of gold will reach $3,700 per troy ounce by the end of 2025.