BENGALURU: Gold prices edged higher on Monday, driven by geopolitical concerns in the Middle East and growing expectations of a rate cut in September ahead of this week’s Federal Reserve policy meeting. Spot gold rose 0.4% to $2,395.48 per ounce by 1312 GMT.
US gold futures for August delivery gained 0.5% to $2,393.50. “There is some unrest in the Middle East that could be constructive ... the market is kind of a little bit on edge given the geopolitics,” said Marex analyst Edward Meir.
Supporting the demand for gold as a hedge against geopolitical risks were worries of a widening conflict in the Middle East following a rocket strike in the Israeli-occupied Golan Heights.
Markets are wagering that the Fed will lay the groundwork for the September rate cut at its policy meeting on Wednesday. “If the Fed confirms a dovish stance, predictions could escalate to potentially three cuts before the end of the year,” Fawad Razaqzada, market analyst at Forex.com, said in a note.
Gold ETFs, storing bullion for investors, saw net inflows last week of 9.8 metric tons, according to the World Gold Council. Gold ETFs are heading for the third consecutive month of net inflows of 39 tons in July.
Meanwhile, consumption of gold in China, the world’s biggest user, fell by 5.6% in the first half of 2024 as demand for gold jewellery tumbled. However, purchasing of gold bars and coins surged.
in India, another major gold consumer, jewellery and bar and coin demand could see a boost of 50 metric tons in the second half of 2024 from last week’s reduction of the state gold import tax to the lowest in 11 years, according to the World Gold Council. Elsewhere, spot silver gained 0.5% to $28.03 per ounce. Platinum rose about 1% to $944 and palladium climbed 1.2% to $910.79.
Comments
Comments are closed.