Gold rose above $2,500 per ounce for the first time on expectations that the Federal Reserve is inching closer to cutting interest rates. In the commodity market, spot gold rose above $2,500/oz on Friday afternoon, exceeding the previous record hit last month, ING analyst Ewa Manthey said in a note.

The increase followed disappointing US housing data that has reinforced bets of faster and deeper cuts from the Federal Reserve. According to Manthey, lower borrowing costs are positive for gold as it doesn’t pay interest.

The Fed has held its key policy rate in a target range of 5.25% to 5.5% – the highest level in more than two decades – since last July.

“Our US economist now sees a 50bp cut in September followed by a series of 25bp moves that would get us back to a Fed funds rate of around 3.5% by next summer”.

In 2024, Gold price has climbed by more than 20% amid geopolitical uncertainties, expectations of interest rate cuts from the Fed and strong appetite from central banks.

Analyst believe that gold’s focus will remain firmly on the scope and timing of the Fed’s likely move to cut rates. Geopolitics will also remain one of the key factors driving gold prices, Manthey said this afternoon.

The war in Ukraine and ongoing conflict in the Middle East, alongside tensions between the US and China, suggest that safe-haven demand will continue to support gold prices in the short to medium term.

The US presidential election in November will also continue to add to gold’s upward momentum through to the end of the year, in our view. Central banks are also expected to keep adding to their holdings, which should offer support.

“We see gold averaging $2,380 in the third quarter and prices peaking in the fourth quarter at $2,450/oz, resulting in an annual average of $2,301/oz”, ING said.

Watch the latest edition of BizHeadlines below:





Ghana’s leading digital news platform, GhanaWeb, in conjunction with the Korle-Bu Teaching Hospital, is embarking on an aggressive campaign which is geared towards ensuring that parliament passes comprehensive legislation to guide organ harvesting, organ donation, and organ transplantation in the country.

Click here to follow the GhanaWeb Business WhatsApp channel