In 2024, gold prices have risen by a cumulative 27%, marking the largest annual increase since 2010. This record surge has weakened retail demand in major consumer countries like China and India.
As of Friday (September 20, local time) at 1:43 PM Eastern Time, spot gold was up 1.3% to $2,620.63 per ounce, while U.S. gold futures closed up 1.2% at $2,646.20. This marks the first time gold has surpassed the $2,600 threshold and continues to rise as the market anticipates further interest rate cuts from the U.S. The Federal Reserve had previously initiated an aggressive easing cycle on Wednesday, cutting rates by 50 basis points, which increased the appeal of non-yielding gold.
Daniel Ghali, a commodity strategist at TD Securities, stated, “Clearly, the Fed has chosen to start the easing cycle with a significant interest rate cut, but there is still some purchasing activity. However, the sources of this buying activity remain outside our focus; ETF inflows are relatively low, and Asian buyers are still in a phase of not purchasing. All of this indicates extreme positioning.”
Deutsche Bank stated in a report that the rise in gold prices “should not last forever,” noting that the Federal Reserve is expected to lower interest rates by only 25 basis points in its next two meetings.
However, some analysts believe that gold prices may continue to rise. Analyst Fawad Razaqzada remarked in a report: “Geopolitical risks, such as ongoing conflicts in Gaza, Ukraine, and elsewhere, will ensure that the demand for gold as a safe haven remains strong. The continued weakness of the dollar makes gold cheaper for holders of other currencies, providing additional support for gold.”
Additionally, spot silver rose by 1.2% to $31.16. Platinum fell by 1.1% to $978.50, while palladium declined by 0.5% to $1,074.84.
