Gold is up around 0.9% today, potentially breaking out of 4-month consolidation amid growing recession fears and declines on Wall Street.
Gold is on a strong four-day winning streak, including today's session. It is breaking July's highs and currently testing mid-June's peak levels. If gold were to close at its current levels, it would mark an all-time high for spot prices, although the daily peak was recorded in April at around $3,500 per ounce. The sharp gains are motivated by recession concerns, which simultaneously strengthen expectations for interest rate cuts in the US. While US data has not been particularly surprising, the lack of an inflation rebound may suggest problems with passing on higher costs to a weak consumer. The consumer themselves is also sending mixed signals, as evidenced by the lower-than-expected University of Michigan consumer sentiment index reading. Concerns are also heightened today by a strong pullback on Wall Street, although this can be partly attributed to position closures on the last day of the week before a long weekend in the US. In recent days, we have also observed accelerated buying from ETF funds, which now hold over 92 million ounces of gold. This week should also bring the strongest weekly gains since June.
Gold is currently up over 2.2% this week. Source: Bloomberg Finance LP, XTB
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Gold is breaking out of the latest local highs from July and could potentially close at an all-time high today. A breakout from the triangle formation suggests a move to the $3,500-$3,515 USD range. Source: xStation5
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