Will gold continue to shine? Gold prices hit a new high, breaking through $2700. Wall Street predicts: It's not over yet!
Driven by uncertainty surrounding the US election, a surge in safe-haven demand due to escalating conflicts in the Middle East, and a loose monetary policy environment, investors flocked to gold, the safest 'haven': Spot gold broke through $2700 per ounce for the first time on Friday, only to have its record high shortly surpassed.
Time:
2024-10-18 16:37
Cailianshe reported on October 18 that due to uncertainty surrounding the US election, a surge in safe-haven demand caused by escalating conflicts in the Middle East, and a loose monetary policy environment, people flocked to gold, the safest "safe haven": Spot gold broke through $2700 per ounce for the first time on Friday, and the record high just set earlier was refreshed.
Spot gold and COMEX gold futures hit record highs on Thursday at the overnight close: Spot gold rose 0.71% to $2692.75 per ounce; COMEX gold futures rose 0.61% to $2707.6 per ounce.
Earlier, Israel said its military had killed Hamas leader Yahya Sinwar. On Thursday (October 17), local time, Israeli officials issued a statement saying that Sinwar may have been killed by the Israeli army, and DNA verification is currently underway. Later that evening, Israeli Foreign Minister Katz confirmed in a statement that Sinwar had been killed by the Israel Defense Forces. This could trigger retaliatory actions from Hamas and Hezbollah.
Daniel Hynes, senior commodity strategist at ANZ Bank, said that safe-haven demand has been boosted amid escalating tensions in the Middle East.
In addition, Niteh Shah, strategist at WisdomTree, also said: "Besides the worrying situation in the Middle East, the US election is approaching, and it's a very competitive election. This creates a lot of uncertainty, and gold is often the investment choice during uncertain times."
Analysts led by Mark Haefele, chief investment officer at UBS Global Wealth Management, said in an email: "We expect uncertainty and volatility to rise before the next US administration is finalized." They suggested that in turbulent trading environments, "gold and oil can be effective portfolio hedging tools."
In addition, the global easing cycle led by the Federal Reserve is also a major factor in the rise of gold. Currently, many investors are betting that the Federal Reserve's shift to a loose monetary policy and the slowdown in US economic growth will help push gold prices further upward.
At the same time, in recent years, central banks have been increasing their gold reserves, and gold purchases in the first quarter of this year hit a record high compared to the same period last year.
Finally, the Trump trade is also one of the driving forces behind the rise in gold prices. Recently, the support rate of US Republican presidential candidate Trump has risen significantly, and the market is increasingly confident that Trump will win the US election early next month.
Kelvin Wong, senior market analyst at OANDA Asia Pacific, said, "With uncertainty surrounding the US election, investors are seeking gold as a safe haven. Trump's inauguration should support gold, as he may exacerbate trade tensions and widen budget deficits."
Continuous bullish sentiment
Although gold prices have been "soaring" this year: the increase in London spot gold in the first three quarters of this year has reached 30%, and is expected to refresh the highest annual increase in history (30.86% in 2007), Wall Street is still full of bullish sentiment.
Representatives at the London Bullion Market Association (LBMA) annual meeting predicted that gold prices are expected to rise to $2941 per ounce in the next 12 months, which means an increase of nearly 10% from the current gold price level.
Ole Hansen, head of commodity strategy at Saxo Bank, said: "A survey released earlier this week by the LBMA shows that the basic expectation for gold prices is to rise to around $3000 per ounce next year."
Goldman Sachs analysts recently raised their gold price target for early 2025 from $2,700 per ounce to $2,900, noting that central banks' gold purchases will remain "structurally high."
Bank of America strategists also said that gold's appeal is growing as other "traditional" safe-haven assets face increasing risks. They wrote in their latest report: "Gold looks set to become the ultimate 'safe haven' asset, driven by increased holdings by traders, including central banks."
Bank of America reiterated its target of $3,000 per ounce for gold by the end of next year, which means an 11.1% increase from Thursday's level.
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Although gold prices rose this week, market volatility has clearly increased. While the US-UK agreement is symbolic, its content is limited and insufficient to alleviate concerns about a global economic slowdown. Therefore, gold prices will continue to fluctuate between safe havens and policy signals, closely monitoring the Federal Reserve's interest rate expectations and global trade sentiment.