Gold Rises on Fed Rate Cut Bets

October 11, 2024

Key Points:

• Gold prices rose 0.5%, with spot gold closing at $2,644.33 per ounce.
• Geopolitical tensions and upcoming U.S. data could push prices higher.

Gold prices continued their upward momentum on Friday, driven by rising expectations of a Federal Reserve rate cut next month.

Spot gold rose by 0.5%, closing at $2,644.33 per ounce. U.S. gold futures followed suit, gaining 0.7% to $2,658.90.

While prices dipped earlier in the week, the market remains strong after reaching a high of $2,685.42 last month.

Technical Indicators Signal Potential for Further Gains

Picture: Gold price chart showing steady gains with bullish momentum, supported by moving averages and positive MACD signals, as seen on the VT Markets app.

The chart indicates steady price gains, with gold opening at $2,629.81 and reaching an intraday high of $2,638.04.

The technical indicators, including the moving averages (MA 5, 10, 30), show bullish momentum, suggesting further upward movement.

Gold has been supported by the dollar index falling from its two-month high, making the metal more attractive for investors holding other currencies.

Check out: Dollar Surges as Fed Outlook Stays Cautious

On Thursday, data revealed that U.S. consumer prices rose slightly more than expected in September, while jobless claims increased to 258,000, surpassing the 230,000 estimate.

The focus now shifts to the U.S. Producer Price Index (PPI) report, due later today, which could further influence gold prices.

The chart shows the price approaching this resistance level, underpinned by bullish MACD readings, indicating that buyers remain in control.

Geopolitical Tensions Boost Safe-Haven Demand for Gold

Elsewhere, escalating tensions in the Middle East continue to provide support for gold, which is seen as a safe haven asset during periods of geopolitical turmoil.

Israeli strikes on central Beirut have raised concerns, further bolstering demand for gold.

Silver and Platinum Edge Higher but Face Weekly Declines

Silver rose 0.2% to $31.25 per ounce, while platinum climbed 0.9% to $975.65.

Both metals, however, are set for weekly declines. Palladium climbed 1.2% to $1,082.07 per ounce, showing a 1% weekly gain.

We observe gold maintaining its bullish momentum, with short-term gains likely if the PPI data points to softer inflation.

The ongoing geopolitical tensions and expectations of a Fed rate cut are expected to keep gold prices supported in the near term.

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