Gold prices saw an increase amid rising geopolitical tensions, driven by U.S. sanctions against Russia and new export controls targeting China. Investors are closely monitoring upcoming U.S. inflation data, which is expected to influence the future of interest rates.
Gold Price Dynamics
On October 23, gold strengthened, with spot gold rising 0.7% to reach $4,123.39 per ounce by 0627 GMT. Simultaneously, U.S. gold futures for December delivery climbed 1.8%, settling at $4,138.10 per ounce.
Geopolitical Influences
- The Trump administration is contemplating limits on software exports to China, including products like laptops and jet engines.
- First-time sanctions were imposed on Russia, targeting oil giants Lukoil and Rosneft due to ongoing Ukraine-related issues.
Market experts maintain a cautious outlook on gold, acknowledging the potential for short-term volatility despite a bullish long-term perspective. Brian Lan, Managing Director at GoldSilver Central, emphasized the importance of cautious investment amid current market fluctuations.
Focus on U.S. Inflation Data
This week, attention shifts to the U.S. Consumer Price Index (CPI) report, scheduled for Friday. Following a recent government shutdown, the report is anticipated to show core inflation at 3.1% for September. Investors have largely priced in a possible 25-basis-point rate cut in the upcoming Federal Reserve meeting.
Gold typically appreciates in value when interest rates drop, as this reduces the cost of holding non-yielding assets.
Market Predictions
Mark Haefele, Chief Investment Officer at UBS, noted that gold remains a strong portfolio diversifier. He suggested potential further gains towards $4,700 per ounce may occur if adverse macroeconomic and political events unfold.
Significantly, gold prices have surged approximately 57% this year, peaking at an all-time high of $4,381.21 on Monday. This rally is attributed to ongoing geopolitical and economic uncertainties, expectations of rate cuts, and substantial purchases by central banks.
Other Precious Metals
- Spot silver increased 1.2%, reaching $49.10 per ounce.
- Platinum dipped by 1.1%, priced at $1,603.70 per ounce.
- Palladium dropped 0.9% to $1,445.43 per ounce.
