Gold returns to rise on international markets, after the heavy 5% correction recorded the day before, due to profit taking after the long rally, which brought prices to new historical records above 4,000 dollars an ounce. The precious metal remains above this level, confirming that the breach of the 4,000 ceiling has given an important bullish signal to the market.
The trend of the spot and futures prices
This morning, the Gold future for December delivery recorded a rise of 1% to 4,151 dollars an ounce, far from the peak of 4,398 dollars reached last week, while the spot price rose by 0.3% to 4,139 dollars an ounce, after having lost around 5% of its value yesterday, the largest daily drop since August 2020.
A technical movement caused by quick profit-taking after the precious metal has repeatedly updated its historical highs, achieving an increase of around 10% in the last month alone and a strong increase of 57% since the beginning of the year.
Tensions between the US and China are easing
Signs of an easing of trade tensions between the United States and China also contributed to triggering the sell-off in gold. American President Donald Trump said he was confident of being able to reach a trade agreement with Chinese President Xi Jinping at next week’s meeting in South Korea. Statements that have eased the concerns that have arisen in recent weeks following the threats from the US leader and Beijing’s response on the export of rare earths.
The United States is also negotiating a trade deal with India to end the long-standing trade standoff and raise tariffs on Indian imports from 50% to 15-16%.
Gold supported by the expectation of new cuts from the Fed
The value of gold is supported by the wait for the next meeting of the Federal Reserve, in which a new rate cut of 25 basis points will be announced with a probability now very close to 100%. However, the market awaits the September inflation data, due out next Friday, after the delay in the release of the data caused by the shutdown.
In any case, an intervention by the US central bank is almost a given and someone within the Board is also pushing for a more aggressive cut of 50 basis points, given the evident difficulties in the labor market.
