Mining
Monday, November 27th, 2023 3:26 pm EDT
Key Points
- Gold Prices Surge to Six-Month High: Gold prices experienced a significant increase, reaching a more than six-month high on Monday. Spot gold rose 0.52% to $2,012.39 per ounce and hit $2,017.82 earlier in the day, marking the highest level since May 16. Gold futures for December also reached $2,018.9, the highest since October 27.
- Weakening U.S. Dollar and Fed Rate Hike Bets: The surge in gold prices was attributed to a weakened U.S. dollar and growing investor confidence that the Federal Reserve has concluded its interest rate hikes. The dollar index, measuring the greenback against major currencies, was 0.13% lower. Markets indicated a more than 90% chance that the Fed would maintain rates at its next two meetings, with a 25% probability of a rate cut as soon as March, according to CME’s FedWatch Tool.
- Analyst Perspectives on Gold’s Outlook: Analysts from Goldman Sachs noted in a Sunday note that gold’s “shine is returning” and highlighted the potential upside in gold prices linked to U.S. real rates and dollar movements. They also anticipated strong consumer demand from China and India, along with central bank buying, to counter downward pressures. Bank of America analysts expressed a base case for gold appreciation from the second quarter of 2024, expecting real rates to be pushed lower by the Fed cutting rates.
Gold prices reached a more than six-month high on Monday, driven by a weakened U.S. dollar and increasing investor confidence that the Federal Reserve won’t pursue further interest rate hikes. Spot gold rose 0.52% to $2,012.39 per ounce, hitting a high of $2,017.82 earlier in the day. Gold futures for December reached $2,018.9, the highest level since October 27. The dollar index, measuring the greenback against major currencies, dropped 0.13% as the market indicates a more than 90% chance that the Fed will maintain rates at its next two meetings. Analysts note that a weaker dollar and lower interest rates typically contribute to higher gold prices. Goldman Sachs analysts predict a potential upside in gold prices linked to U.S. real rates and dollar movements, highlighting strong consumer demand from China and India, along with central bank buying. Bank of America analysts expect gold to appreciate from the second quarter of 2024 as the Fed cuts rates, impacting real rates.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/27/gold-at-six-month-high-as-dollar-declines-and-investors-eye-rate-cuts.html
