Spot gold was 0.3% higher at $2,333.69 per ounce after reaching its highest level since June 7 earlier in the session
Gold prices hit a two-week high on Thursday, after recent weak U.S. economic data raised market expectations of interest rate cuts from the Fed later this year, while uncertainty surrounding multiple elections globally also lent support.
Spot gold was 0.3% higher at $2,333.69 per ounce as of 0908 GMT, after reaching its highest level since June 7 earlier in the session. U.S. gold futures were stable at $2,347.30.
Gold remains primarily driven by market expectations surrounding the Fed’s policy pivot. It may well remain rangebound for a while, until U.S. economic data can pave the way for reduced interest rates and trigger the next leg up for gold, according to Han Tan, chief market analyst at Exinity Group.
Last week’s data showed a moderation in the labour market and price pressures, followed up with soft retail sales data on Tuesday, indicating that economic activity remained lacklustre in Q2.
The Federal Reserve is looking for further confirmation that inflation is cooling as they steer cautiously toward what most expect to be a rate cut or two by the end of 2024.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
In addition, gold was buoyed by safe-haven bids on persistent geopolitical tensions, downside economic risks, and the uncertainty surrounding French politics.
Last week, France’s president called a snap election, with its high debt levels a source of worry for market participants.
The market’s immediate focus is on the U.S. weekly jobless claims data due at 1230 GMT as well as flash PMI on Friday.
We hold a positive view for gold with a price target of $2,500 per ounce by the end of 2024, ANZ analysts stated in a note.
