Gold prices surged to $2,694 today, marking their most substantial weekly gain since October 2023, with a remarkable 4.9% increase driven by heightened geopolitical tensions and shifting monetary policy expectations. The precious metal's rally has been particularly notable, posting gains for five consecutive sessions amid escalating Russia-Ukraine conflicts.
The market received a significant boost following reports of Russia launching a new hypersonic intermediate-range ballistic missile at Ukraine's Dnipro region, marking a serious escalation in the 33-month-old conflict. This development, coupled with the Biden administration's decision to permit Ukraine's use of U.S.-made weapons for deep strikes into Russia, has substantially increased safe-haven demand.
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Market Implied Rate Cuts. Source: Bloomberg
Adding momentum to gold's upward trajectory, Chicago Fed President Austan Goolsbee's dovish comments suggested interest rates could move "a fair bit lower," while expressing confidence in inflation's trajectory toward the Fed's target. Market participants are now pricing in a 56% probability of a 25-basis-point rate cut in December, according to Bloomberg.
The precious metal has demonstrated remarkable resilience this year, posting a 30% gain despite dollar strength and mixed U.S. labor market data. Thursday's report showed weekly initial jobless claims dropping to 213,000, a seven-month low, beating economists' expectations of 220,000. Institutional interest remains robust, with SPDR Gold Trust, the world's largest gold-backed ETF, reporting a 0.29% increase in holdings to 877.97 tonnes.
Looking ahead, major financial institutions maintain bullish outlooks for 2025, with both Goldman Sachs and UBS recently issuing positive forecasts. The market will closely monitor upcoming U.S. consumer sentiment data and remarks from Fed Governor Michelle Bowman for further direction on monetary policy.
The broader precious metals complex has also benefited from the positive sentiment, with silver rising to $31.06 an ounce, palladium reaching $1,040.85, while platinum remained steady, all tracking for weekly gains amid the heightened geopolitical premium.
Gold (D1 Interval)
Gold is capitalizing on bullish momentum, approaching resistance at the 61.8% Fibonacci retracement level. Yesterday, it closed above the 50-day SMA, and today it is trading above the 30-day SMA. RSI shows bullish divergence, and MACD issued a buy signal yesterday. For bears to regain control, the key level would be the 38.2% Fibonacci retracement level.
