Due to heightened demand for shelter, the price of an ounce of gold jumped by 40 USD yesterday, breaking a five-session losing trend.
At the end of trade on August 8, the price of an ounce of global spot gold jumped by USD 44. As more and more investors come to understand that gold offers better stability, the metal is doing well. The Director of Operations of Allegiance Gold, Alex Ebkarianv, stated that they are moving from riskier assets to safer havens.
What do experts say?
Allegiance Gold experts have a highly positive outlook for gold’s future. Strong shelter demand is bolstering the market, and investors are beginning to anticipate a significant rate cut from the US Federal Reserve (Fed) in September.
Precious metals, however, are subject to a wide range of changes based on the effects of interest rate lowering programs. “If the Fed actually reduces interest rates by 50 basis points (0.5%), prices will increase sharply,” he had forecast.
Geopolitical instability in the Middle East is another factor driving up gold prices. The possibility of Iran retaliating against Israel has increased following the assassinations of prominent figures by Hezbollah and Hamas last week.
In a volatile socio-economic context, gold is considered a risk prevention strategy. In case of low interest rates, the cost of this instrument also tends to increase.
Important predictions
After last week’s dismal US jobs report, banks JPMorgan, Citigroup and Wells Fargo all forecast the Fed will lower interest rates by 50 basis points in September. According to the CME FedWatch interest rate tracker, Investors are currently betting 72%.
Only 233,000 new claims for unemployment benefits were filed in the US last week, according to data released on August 8. This number is lower than anticipated, having decreased from 250,000 applications the week before. This has reduced worries over the state of the biggest economy in the world. Amid concerns of a US recession, gold experienced a dip of almost 70 USD earlier this week, causing chaos in the global financial markets.
Yesterday saw price increases for other metals as well. An ounce of silver increased 3.4% to $27.50. At $932, platinum increased 1.4%. Palladium closed at 918 USD after rising 4%.
