Gold prices have surged above $2,600 for the first time, driven by safe haven demand, a weak dollar, expectations of further U.S. interest rate cuts, and ongoing tensions in the Middle East. As of 13:28 GMT, spot gold (XAU/USD) was trading at $2,618.86 per ounce.
The latest rise follows the commencement of the Federal Reserve’s easing cycle on Wednesday, contributing to gold’s impressive performance this year. Analysts expect continued dollar depreciation as the Fed aligns its policies with those of other central banks that began their rate cuts earlier.
There are predictions that gold could potentially reach $3,000 per ounce by year-end, fueled by geopolitical risks and investors seeking protection against a slowing economy. In recent weeks, gold has shown a strong inverse relationship with the U.S. dollar and Treasury yields.
The outlook for gold appears to be upward, as momentum trades continue to support its price strength, despite being viewed as overbought and significantly above fair value.
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