International spot gold price rises above $3,800 per ounce
Xinhua News Agency, Beijing, September 29th – The international spot gold price broke through $3,800 per ounce for the first time on the 29th, reaching a new all-time high. This is the first time the international spot gold price has broken this threshold.
The international spot gold price rose to $3,819.81 per ounce that day. Data from the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), showed that its holdings increased by 0.89% to 1,005.72 tons as of the 26th, from 996.85 tons the previous day.
Reuters believes that the new high in gold prices was primarily driven by a weaker dollar and expectations that the Federal Reserve will further cut interest rates this year.
Bloomberg News reported that the dollar weakened as investors awaited a meeting between U.S. congressional leaders and U.S. President Trump.
The Associated Press reported that Senate Democratic Leader Chuck Schumer and Republican Leader John Thune are scheduled to meet with Trump at the White House on the 29th to discuss a bill to extend government funding. The Senate is expected to vote on the House-passed bill on the 30th. If passed, the bill would allow the US government to continue operating for seven weeks while Congress completes its annual spending bill.
Bloomberg reported that a US government shutdown could delay the release of key employment data this week, obscuring the Federal Reserve’s monetary policy path. According to the Chicago Mercantile Exchange’s FedWatch tool, traders currently price a 90% probability of a Fed rate cut in October and a roughly 65% probability of another rate cut in December.
In a research note released on the 28th, strategists at Barclays Bank stated that gold prices appear inexpensive relative to the US dollar and US Treasuries. Given the risk of the Fed losing its independence, gold prices “should reasonably include some premium associated with the Fed,” making gold an unexpected hedge.
Data from Bloomberg shows that gold prices have risen 45% this year, reaching new highs, driven by gold buying from central banks and the Federal Reserve’s renewed interest rate cuts. Reports predict that gold prices are expected to rise for the third consecutive quarter next week. U.S. institutions such as Goldman Sachs and Deutsche Bank expect the upward trend to continue.
In addition, silver prices hit a new high since 2011 on the 29th. Citigroup predicts that platinum supply may face constraints due to U.S. government policies.
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