Rua Gold Inc. (TSXV: RUA, OTC: NZAUF, WKN: H8E)
An Emerging Gold Explorer with Two Highly Prospective Land Packages in New Zealand’s historical gold fields.
Federal Reserve Chairman Jerome Powell, speaking at the central bank’s annual meeting in Jackson Hole on Friday (23 August local time), said the market had received the clearest signals that the time had come to adjust policy. The magnitude of the rate cut will depend on upcoming data releases, the evolving outlook, and the balance of risks.
By Friday’s close, the precious metal’s price stood at $2,500 an ounce for the fifth time in a year, continuing to run near all-time highs. December gold futures contract last traded at $2,547 an ounce, essentially unchanged from a week ago.
Eric Strand, founder of AuAg Funds, said the Fed’s interest rate cut cycle is just getting ready to begin, gold has already reached $2,500. While western investors’ interest in gold is just beginning, and interest rate cuts are expected to reduce the opportunity cost of holding the precious metal, all of which signals that gold is not overbought in its current position, and there’s still momentum to continue its upward movement.
According to data from SPDR Gold Shares, the world’s largest gold exchange-traded fund, year-to-date holdings are down by more than 21 tonnes, while there have been 12.38 tonnes of inflows so far this month.
Adam Button, head of currency strategy at Forexlive.com, said gold prices will continue to shine as the dollar slides as interest rates move lower, which doesn’t look like a market that is topping. He noted that the Fed is ready to cut rates aggressively since the labour market has been weak for consecutive months, and interest rates, as well as the dollar, are headed downwards going forward.
Phillip Streible, chief market strategist at Blue Line Futures, said gold prices could surge as high as $2,600 an ounce before the market sees more sustained selling pressure and profit-taking. He noted that in addition to a possible 50 basis point rate cut in September, the market also sees rates falling by more than 100 basis points by the end of the year.
Kitco News’ latest weekly gold survey shows that the vast majority of industry analysts and retail investors believe that gold will rise above this week’s recent all-time highs. Seven out of 12 analysts (58 per cent) who participated in the Kitco News gold survey expect gold prices to rise next week. Meanwhile, 146 out of 225 retail investors (65 per cent) who participated in the online survey expect gold prices to rise next week.
According to Jim Wyckoff, senior analyst at Kitco, both technical and fundamental factors are in favour of gold prices continuing to rise next week, with technical charts showing higher gold prices and bullish fundamentals and investment sentiment supporting prices as well.
