Gold prices soared to a new all-time high of $2,685 on Thursday, even as the U.S. Dollar began to recover from losses incurred during the Asian and European trading sessions. Positive economic indicators from the U.S., combined with China’s stimulus measures and escalating tensions in the Middle East, have fueled bullish sentiment for the precious metal. As of the latest data, XAU/USD is trading at approximately $2,670.
Investor sentiment remains upbeat, reflected in the performance of U.S. equities. Meanwhile, U.S. Treasury bond yields held steady, with the 10-year Treasury note yielding 3.798%, an increase of one basis point. The U.S. Dollar Index (DXY) remained relatively unchanged at 100.91.
Chinese Stimulus Supports Gold’s Rally
China’s recent announcements are contributing to gold’s upward trajectory. The Chinese Politburo has emphasized its commitment to stabilizing the real estate market, implementing additional fiscal stimulus following a 20 basis point cut in the 7-day reverse repo rates by the People’s Bank of China (PBoC), which lowered rates from 1.70% to 1.50%.
This latest cut, along with last week’s 50 basis point reduction by the Federal Reserve (Fed), has propelled gold to new record highs as global central banks reduce borrowing costs. Despite a resilient U.S. Dollar, the prevailing expectations that the Fed may pursue an aggressive easing strategy have kept bullish momentum alive in the gold market.
Strong U.S. Economic Growth
The U.S. economy exhibited robust growth in the second quarter of 2024, according to the Bureau of Economic Analysis (BEA). Additionally, the U.S. Department of Labor reported a decrease in the number of individuals filing for unemployment benefits last week, further indicating that the labor market remains strong and resilient.
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