Gold prices soared on Friday, aided by China’s recent stimulus measures and rekindled expectations for U.S. interest rate cuts. The yellow metal is on track for its second straight weekly gain, with silver prices breaching the $30 level to strike an 11-year peak.
Spot Gold Nears All-Time High, Settles Higher on Rate Cut Bets
Spot gold prices rose 1.5% to $2,412.83 per ounce by 1745 GMT, closing in on an all-time high of $2,431.29 hit on April 12. The surge came as investors priced in higher chances of the Federal Reserve lowering interest rates to support the virus-hit U.S. economy.
U.S. Gold Futures Settle 1.3% Higher on Haven Demand
U.S. gold futures for August delivery settled 1.3% higher at $2,417.40 per ounce on the Comex division of the New York Mercantile Exchange. Safe-haven demand for the precious metal remained elevated amid economic uncertainties fueled by the COVID-19 pandemic.
Silver Breaches $30 to Hit 11-Year Peak on Industrial Demand Hopes
The white metal silver also witnessed robust buying interest, with prices breaching the $30 level for the first time since March 2013. The surge came on expectations of a rebound in industrial demand as China implements monetary and fiscal stimulus to revive its economy.
Gold Rally Fueled by Weaker Dollar, Low-Interest Rates
A key factor powering gold’s rally has been the sliding U.S. dollar, which makes dollar-priced bullion cheaper for buyers holding other currencies. Low interest rates globally that reduce the opportunity cost of holding non-yielding bullion have also provided support.
Technical Outlook Bullish as Bulls Eye Fresh Record Highs
From a technical perspective, the near-term outlook remains bullish for gold, with a clear target of the April 2020 record peak around $2,431. Analysts expect the rally to gain further momentum if prices can take out that level convincingly, potentially accelerating gains towards $2,500.
