The price of gold has broken back above the key $2,000 per ounce level today as the dollar slumps and bond yields drop, with markets betting the Federal Reserve is nearing the end of its rate hike cycle.
Spot gold reached as high as $2,007 in afternoon trading. While not the first time gold has crossed the psychologically important $2,000 barrier this year, it marks a renewed push after consolidating below the level for the past month.
The gains come as the US dollar slumps to multi-month lows and yields on government bonds continue to drop, reducing the opportunity cost of holding non-interest bearing gold.
Market participants are now looking ahead to the release of the Fed’s latest policy meeting minutes this evening. If the minutes strike a dovish tone, gold could rally further on expectations of rate hike pauses. However, more hawkish signals could stall the metal’s ascent.
While rate cuts are not expected until 2024, gold bulls will be eying key technical resistance at $2,010. A break above this level could pave the way for a re-test of 2022 highs above $2,070, with the declining dollar and yields providing fundamental support.