Gold futures are on track for another session of hitting record highs. The yellow metal has been notching nearly three dozen all-time high finishes this year, and prices are eyeing a range of $2,640 and $2,650. With the Federal Reserve seen cutting interest rates at every meeting heading in 2025, gold could pounce on these developments.
December gold futures surged $17.70, or 0.73%, to $2,632.30 per ounce at 14:11 GMT on Friday on the COMEX division of the New York Mercantile Exchange. Gold is poised for a weekly gain of around 1%, lifting its year-to-date rally to 2%. Over the last 12 months, the precious metal has soared more than 35%.
Silver, the sister commodity to gold, took a breather on its massive upward climb. October silver futures tumbled $0.088, or 0.28%, to $31.335 per ounce. The white metal is on track for a weekly boost of 1%, increasing its 2024 gain to above 30%.
Gold prices hit another record intraday high even as the greenback strengthened and US Treasury yields were mostly in the green.
The US Dollar Index (DXY), a measurement of the buck against a basket of currencies, surged 0.29% to 100.91, from an opening of 100.69. The index registered a weekly drop of 0.2%, adding to its year-to-date decline of 0.4%.
A strong buck is typically bearish for commodities priced in dollars because it makes it more expensive for foreign investors to purchase.
US Treasury yields were mostly up, with the benchmark ten-year yield adding 1.5 basis points to 3.755%. The two-year yield surged 3.5 basis points to 3.639% while the 30-year bond was little changed at 4.08%.
Gold is sensitive to fluctuations in interest rates because it influences the opportunity cost of holding non-yielding bullion.
The Federal Reserve lowered interest rates for the first time in more than four years, kicking off the easing cycle with a jumbo 50-basis-point cut. According to the Summary of Economic Projections (SEP), the Fed signaled another 50 basis points worth of cuts by the year’s end.
The metals market might be finding more support from geopolitical tensions after reports suggested Israel fired off missiles in Beirut, Lebanon. This, experts say, could bolster physical demand in Asia.
But gold could be in store for a pullback as prices are in overbought territory.
In other metal commodities, October copper futures shed $0.015, or 0.24%, to $4.337 per pound. October platinum futures declined $13.30, or 1.34%, to 981.10 an ounce. October palladium futures plunged $28.60, or 2.6%, to $1,070.00 per ounce.