In the early hours of Monday, gold is locked in a battle around the $2,500 mark, having recently touched all-time highs at $2,510. Traders in the gold market are opting to secure profits, readjusting their positions ahead of the pivotal release of the US Federal Reserve (Fed) Minutes from the July meeting and Chairman Jerome Powell’s upcoming speech later this week.
While the price of gold has seen a slight easing, the overall bullish sentiment remains intact. The significant surge in gold prices during the latter part of Friday’s trading session, with a notable 3% gain for the week, underscored the market’s optimism.
The recent rally in gold prices was primarily fueled by mounting speculations of a potential rate cut by the Fed in September. Market participants are closely eyeing the Jackson Hole Symposium scheduled for the upcoming week, anticipating fresh insights from Fed Chair Jerome Powell regarding potential further easing measures post-September.
Against a backdrop of dovish remarks from Chicago Fed President Austan Goolsbee cautioning against prolonged restrictive monetary policies, gold soared to a new peak of $2,509 on Friday. This surge was further fueled by escalating tensions in the Middle East, with looming concerns of a possible Iranian strike on Israel as Hamas contemplates ceasefire negotiations.
In today’s trading session, gold buyers seem to be pausing, consolidating the gains from Friday while seeking safe-haven assets amidst geopolitical uncertainties. The rejection by Hamas of the latest US proposal for a Gaza hostage and ceasefire agreement on Sunday has further spurred demand for gold. The Iran-backed Hamas group has attributed blame to Israeli Prime Minister Benjamin Netanyahu for introducing fresh hurdles in the negotiations, as reported by The Times of Israel.
Despite the retracement in gold prices amid the geopolitical unrest, the pullback remains limited, supported by technical indicators on the daily timeframe suggesting the potential for further upside movement in the near future. Investors are closely monitoring these developments as they navigate the intricate interplay between market dynamics and global geopolitical tensions.
