Gold hit record high amid expectation of US interest rate cuts
Date
8/18/2024 8:59:01 AM
(MENAFN) Gold prices surged to a new record high of USD2,492.55 per ounce yesterday as investors sought refuge in safe-haven assets ahead of a potential interest rate cut by the U.S. Federal Reserve. This peak surpassed the previous record set in July, driven by weak housing data and the growing expectation that the Fed will lower rates in its upcoming September meeting. The rise in gold prices reflects heightened market uncertainty and a shift towards assets perceived as safer amidst changing economic conditions.
The increase in gold prices was further supported by a notable decline in bond yields, which is often associated with expectations of lower interest rates. Analysts, including Fawad Razaqzada from City Index and Forex, pointed out that the anticipation of a Federal Reserve rate cut has played a significant role in pushing gold prices upward. The negative movement in bond yields contrasts with the recent volatility in Wall Street indices, which experienced declines following a previous rise spurred by stronger-than-expected retail sales data.
On the day of gold’s record-setting performance, major U.S. stock indices fell, reversing the gains made earlier in the week. The Dow Jones Industrial Average dropped by 0.2 percent, the S&P 500 declined by 0.3 percent, and the Nasdaq Composite also fell by 0.3 percent. This downturn followed Thursday’s uptick in indices, which had been buoyed by retail sales data that alleviated concerns about a potential economic recession in the U.S.
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