The value of gold topped $2,500 per ounce for the first time as hopes of interest rate cuts emerged. The spot gold bullion gained 2.2% after the latest slew of US housing data came in cooler than expected, thereby increasing hopes for the Federal Reserve to consider interest rate cuts at its next policy meeting. Hopes for rate cuts have been bolstered by figures showing a decline in new home construction in the US.
Speaking of gold investors and their market outlook, Bart Melek of TD Securities explained that they are, “typically more prone to think the Fed will be more aggressive on the monetary accommodation front.” The TD Securities global head of commodity strategy was of the opinion that the price of gold may even hurtle past $2,700 in one of the coming quarters as macroeconomic data lines up.
Comex gold futures surged toward a four-year high for the week ended August 13. According to data from Bloomberg, gold holdings in exchange-traded funds rose over the past few months, thereby reversing several months of declines.