Gold opened the new week of trading at its peak price at a weekly high. The bullion was trading around $2,440 per ounce, rebounding from a 0.5% decline over the course of last week. Gold has risen in value by approximately 18% since the start of the year.
Spot gold prices rose by 0.5% to $2,442.16 per ounce, while the Bloomberg Spot Dollar Index edged higher by 0.1% on Monday morning London time.
The rise in gold prices has been largely supported by investor optimism about the US economy’s trajectory, with expectations of an impending Federal Reserve interest rate cut at its September policy meeting. In addition to the optimism surrounding the Federal Reserve’s next moves, gold’s rise in value has also been supported by a rising demand out of China.
Still, there is a chance that the Fed will not cut rates in September, with Fed Governor Michelle Bowman acknowledging that inflation risks still persist, meaning that there is a possibility that rate cuts may not happen as soon as investors hope.
Gold is “supported by geopolitical risks and anticipated Federal Reserve rate cuts amid heightened tensions involving Iran, Israel, and Ukraine,” a report by Saxo Bank A/S read. According to weekly data supplied by the Commodity Futures Trading Commission, investment fund managers’ gold bets hit a five-week low.