Gold has pushed higher once again this week as markets continue to weigh up a perfect storm of geopolitical risks, fiscal policy, and economic concerns.
Gold has gained 2% this week, and has seen a new all-time high this morning in Euros of €2,291.10 per ounce. Gold also went within touching distance of the current USD record of $2,532.39, hitting $2,529.29. In GBP gold reached £1,933.49 this morning, just short of the UK record of £1,954.62.
The next three months have been touted as key for precious metals for most of 2024. Next week will likely see the first interest rate cut in the US, and with US inflation data due out later today, alongside signs of a weakening US economy in recent jobs and output figures, there is a chance for a larger 50 basis point cut.
The US dollar has recovered from some of the weakness seen a couple of weeks ago, but if rates start coming down and the economy fails to achieve the ‘soft landing’ many had hoped for, there could be further dollar weakness to come.
The US election on November 5th also holds much uncertainty for markets. Polls suggest it could go either way. Last night’s Trump-Harris debate was a better showing for Democrats than the disastrous Biden debate that prompted his withdrawal from the race, but doesn’t appear to have significantly moved the needle in favour of either candidate.
Geopolitics has been less of a focus in recent weeks, but should never be discounted. Israel continues to carry out missile strikes in other countries that could spark further escalation in the Middle East. Russia and Ukraine continue to trade blows, and there has been suggestions of lifting restrictions against the use of long-range US missiles against Russia that could prompt further retaliation.
It seems only a matter of time before gold pushes onto further records in US dollars given it has repeatedly bumped up against the current one. Next week’s Fed meeting will be one key event for investors to watch for, and could easily prompt the next push up for gold.
