Gold has hit a new all-time high above $4,300 an ounce on concerns over the US banking sector and expectations of further rate cuts by the Federal Reserve. This was its best weekly result in five years. Reuters reported.
Spot gold rose 0.3% to $4,336.18, and reached a high of $4,378.69 an ounce during trading. The metal gained about 8% for the week, its biggest gain since 2019. Analysts attribute the rise to growing investor concerns over the problems of regional US banks, trade disputes and expectations of new steps by the Fed.
“The level of $4,500 per ounce may be reached earlier than expected, but much depends on how long the concerns over trade between the US and China and the threat of a shutdown last”, – said Tim Waterer, chief market analyst at KCM Trade.
He stressed that investors are actively investing in gold due to fears of a crisis in the US banking system:
“The worsening credit risks at US regional banks have given traders another reason to buy gold”.
The Federal Reserve is expected to continue its rate-cutting cycle. Fed Governor Christopher Waller has signaled support for another rate cut due to a weakening labor market. Investors are forecasting a 25 basis point cut at the Oct. 29-30 meeting and another in December. Since gold does not provide a direct return, periods of low interest rates have traditionally supported demand for the metal.
Meanwhile, silver fell 0.7% to $53.86 an ounce, after rising during the week. Earlier in the session, it hit a record high of $54.35, tracking gold’s performance.
Platinum fell 0.7% to $1,701, while palladium fell 0.4% to $1,607.93. Both metals ended the week in positive territory.
