Spot Gold eased below the $4,000 mark, but was still on course for its eighth consecutive weekly advance, supported by geopolitical and economic tensions as well as expectations the Federal Reserve will continue easing its monetary policy this year.
The metal’s recent rally has taken it to an all-time high of $4,059.05/oz. on Wednesday, after which it pulled back below the $4,000 level, as investors likely took profits.
“Options markets revealed a rise in volatility alongside downside protection for gold during the final stages of this rally, and it seems a good a time as any for gold bulls to book some profits. Still, I expect any pullback could be limited,” City Index senior analyst Matt Simpson was quoted as saying by Reuters.
The minutes of the FOMC’s September meeting showed that policy makers agreed risks to the US job market were sufficiently high to warrant a rate cut.
Yet, a majority emphasized the risks to the inflation outlook were still tilted to the upside.
Markets are now pricing in about a 94.5% chance of a 25 basis point Fed rate cut in October and an 81.5% chance of another 25 bps cut in December.
Gold has also been supported by robust ETF demand. Data by the World Gold Council showed that global ETFs had registered an inflow of nearly $26 billion in September – a record amount for the month.
Meanwhile, on the geopolitical front, Israel’s government has ratified a ceasefire agreement with Hamas on Friday.
Spot Gold was last down 0.42% on the day to trade at $3,959.72 per troy ounce.
The precious metal has risen 2.23% so far this week.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Year-to-date, the yellow metal has surged 50.89%.
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