Gold prices have surged to a near six-week high, buoyed by increasing anticipation of a Federal Reserve rate cut next week. According to Betashares Investment Strategist Hugh Lam, recent weak US private employment data has heightened concerns regarding the health of the American labour market, further driving gold’s appeal.
Mr. Lam suggests several factors could continue to support gold prices into the coming years. These include a potentially weaker US dollar, reduced borrowing costs, ongoing demand from central banks, and renewed investment in gold ETFs by Western investors. These elements, according to Lam, create a favourable environment for gold through to 2026.
While the sharp rally witnessed this year might lead to a period of consolidation in the short term, political developments in Washington could prolong the current dovish sentiment. Speculation that economic advisor Kevin Hassett may be nominated to replace Jerome Powell as Fed chair is expected to reinforce this outlook, impacting both interest rates and gold prices.
As of the latest update, gold was trading up by 0.2 per cent, reaching $US4208.35 an ounce. Betashares is an Australian investment management firm that offers a range of exchange traded funds (ETFs). ETFs are investment funds traded on stock exchanges, similar to stocks.
