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Beware the gold rush?

Journalist: John Choong (Head of Markets and Research), Newspage

ended 21. August 2024

After hitting an all-time high of $2,569 yesterday, gold continues to hold its own, currently trading at $2,555. However, with the all-important Jackson Hole symposium starting later today and non-farm payrolls revisions expected to show a sizeable downgrade to jobs created over the past year, this could impact the price of gold.

While several experts continue to be bullish on the yellow metal as impending rate cuts from the US Federal Reserve will likely devalue the USD and thereby prop gold up, some have also cautioned against buying at the peak.

Newspage asked experts for their views, below.

1 responses from the Newspage community

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Editor
Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
As gold prices hover near historical peaks, the market is bracing for potential volatility from Jackson Hole and upcoming non-farm payrolls data. The precious metal, which recently hit an all-time high, currently trades at $2,555 per ounce. Investors are keenly watching for cues from Federal Reserve Chair Jerome Powell's speech, which could hint at the timeline of future interest rate cuts. The anticipation of lower borrowing costs has been a critical driver of gold's recent rally, as a weaker dollar typically boosts the appeal of gold as a hedge against currency devaluation. However, the bullish sentiment surrounding gold is tempered by looming downside risk. Buying gold at these elevated levels could expose investors to corrections, especially if the FED's anticipated rate cuts are less aggressive than expected. The non-farm payrolls report could further influence market dynamics, with a stronger-than-expected jobs report bolstering the dollar and exerting downward pressure on gold.