Gold hits to Record High as US Consumer Confidence Plummets
Since the U.S. weak consumer confidence, fueled by the Federal Reserve’s record-breaking monetary easing, gold has reached an all-time high and the price of gold has reached an all-time high, no doubt that this arrangement is profitable for commodity investors.
Gold (XAU/USD) hit a record high of $2,670 per troy ounce on Wednesday, as the U.S. following Tuesday’s sharp drop in consumer confidence data. Given this decline, the market is now more optimistic that the Federal Reserve will cut interest rates again to spur economic growth. Low interest rates for gold are more attractive to investors because they reduce the opportunity to hold non-returning assets.
Recent actions to support China’s slowing economy also contributed to the rise in gold prices. The People’s Bank of China on Tuesday announced its largest stimulus package since the COVID-19 pandemic. That offer included a significant discount on borrowing costs. These tight currency constraints add to Gold’s rising momentum, further strengthening its position.
Rising geopolitical concerns about the Middle East are driving gold prices higher. Israeli bombing of Hezbollah targets in Lebanon and the unpredictability of world markets have increased investor interest in the safe gold asset.
US Economic Woes Boost Gold’s Appeal
Gold rose on strong signals from the United States. For financial reasons. In September, the Conference Board’s Consumer Confidence Index fell from a record low of 103.9, to 98.7 from a high of 105.6 in August. The CME FedWatch tool projects the probability of a 50 basis point (bps) rate cut by the Federal Reserve rising from 50% to 60% as a result of this sharp decline in market expectations.
Although hawkish Federal Reserve Governor Michelle Bowman sought to calm markets by suggesting that a graduation program for financial stability could be more successful, her comments that markets are still pricing in shortage a the need for aggressive action has not significantly damaged appetite for gold, as FXStreet carries a 7.0 carry no rating on FedTracker .
Technical Analysis: Bullish Momentum for Gold
Technical gold indicators remain largely positive. Short-, medium- and long-term charts show strong momentum as the red metal sets new records. In keeping with the well-known principle that “growth is your friend”, this strong increase indicates that gold bullion is enjoying a new boom.
A combination of factors such as geopolitical turmoil, disastrous economic recovery and economic uncertainty looks to drive gold steadily higher. Investors are wary of gold because in this turbulent world, gold is preferred at such times.
Leave a Reply