Gold closed higher this Thursday (25), after mixed data from the United States raised doubts about the performance of the American economy and the Federal Reserve’s (Fed) interest rate trajectory. On Comex, the metals division of the New York Mercantile Exchange (Nymex), gold scheduled for delivery in June closed up 0.18%, at US$2,342.50 per troy ounce.
Gold prices were supported in this session by slower growth in the US Gross Domestic Product (GDP), along with persistent inflation, in the first quarter of 2024. This scenario cast doubt on the pricing of Fed interest cuts from September. According to the CME Group monitoring tool, the probability of rates being maintained rose from 30.2% yesterday to 40.6% around the time mentioned.
The scenario boosted the dollar and Treasury interest rates at first, but the American currency lost strength again against strong rivals. The weak dollar also tends to favor gold and other commodities by making acquisition cheaper for holders of other currencies.
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XTB MENA analyst Hani Abuagla points out that geopolitical tensions remain another important factor for gold. “If tension persists and interest rates are lowered, this could further stimulate the impetus to buy gold, also from ETF funds, which constitute the final piece in building a multi-year bull market in precious metals,” he says Abuagla.
In a report, the World Bank projects that the price of gold should reach new records this year, before moderating slightly in 2025. In addition to geopolitical challenges, the rise should occur due to strong demand from several central banks in countries in development, according to the institution.
*With information from Dow Jones Newswires
