Gold futures hit another record high in intraday trading, firming above $2,700 and adding to their impressive 2024 rally. The yellow metal continues to notch all-time high settlements even as the US dollar and Treasury yields remain elevated. Can the financial markets expect $2,800 by the year’s end?
December gold futures advanced $26.30, or 0.97%, to $2,733.80 per ounce at 17:25 GMT on Friday on the COMEX division of the New York Mercantile Exchange. Gold prices are poised for a weekly gain of around 2.2%, adding to their year-to-date rally of 32%.
Silver, the sister commodity to gold, roared passed $33 to finish the trading week. November silver futures spiked $1.511, or 4.76%, to $33.285 per ounce. The white metal has rallied 5% this week and is up 39% so far this year.
Market watchers attribute various reasons for the precious metals’ massive end-of-week rally.
Geopolitical tensions have been one of the chief contributors to the rally. Investors have been flocking to gold on concerns of a broader war in the Middle East, especially now that Israel has killed multiple Hamas and Hezbollah leaders. Israel and these terrorist organizations have repeatedly pledged to keep fighting.
Expectations of looser Federal Reserve policy have also fueled gold’s rapid ascent. While the futures market is anticipating a less aggressive central bank, traders are pricing in a falling-rate environment, including another 50-basis-point interest rate cut in November.
Although the greenback and government bond yields have strengthened over the last month, they took a breather on Friday.
The US Dollar Index (DX), a gauge of the greenback against a basket of currencies, tumbled 0.32% to 103.49, from an opening of 103.81. The index is up 0.6% this week and has risen 2.1% year-to-date.
A weaker buck is good for commodities priced in dollars because it makes it cheaper for foreign investors to purchase.
US Treasury yields mainly were red across the board, with the benchmark ten-year yield 2.1 basis points to 4.075%.
Gold is sensitive to fluctuating interest rates because it influences the opportunity cost of holding non-yielding bullion.
The fundamentals remain strong for gold, and market analysts say there would be little reason for it to halt its rally outside of bouts of profit-taking. Max Layton, global head of commodities research at Citi, told CNBC that gold could hit $3,000 per ounce over the next six to 12 months.
In other metal markets, November copper futures soared $0.064, or 1.48%, to $4.389 per pound. November platinum futures climbed $17.50, or 1.74%, to $1,023.30 per ounce. November palladium futures rocketed $38.60, or 3.69%, to $1,084.00 an ounce.