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Overnight, international gold futures prices rose for the third consecutive trading day. What are the reasons for the recent rise in gold prices?
CNBC Jiang Yu: Gold futures for December delivery on the New York Mercantile Exchange closed at $2,480.8 an ounce overnight, once breaking through the important psychological barrier of $2,500 during the session, and since Tuesday local time, the futures have risen more than $50. Gold futures for December delivery began trading at $2,490.8 an ounce in early Asian trading.
The recent rise in international gold prices is mainly driven by several factors. The first is the direction of the Fed's monetary policy, although the Fed is still on hold at this week's interest rate meeting, Fed Chairman Jerome Powell sent a clearer signal, saying that if the economic data continues to maintain the current trend, the Fed may start cutting interest rates in September.
CME federal interest rate futures show that the market is currently betting on a 67.5% probability that the Fed will cut rates by 25 basis points in September, compared with a 32.5% probability of a 50 basis point cut.
The Fed's latest statement signals a possible imminent shift from tightening to easing in monetary policy, a shift that is positive for gold. In general, lower interest rates increase the attractiveness of non-interest-bearing assets such as gold. Another factor is the recent escalation of global geopolitical tensions, which is also positive for gold, which is a safe haven.
After the recent attack on the Hamas leader, Iran vowed to make Israel pay, and the market feared a worsening situation in the Middle East. Finally, political uncertainty is also a major factor. The market is also watching United States debt growth and fiscal deficits, and with the United States election approaching, neither party seems to have any intention of cutting spending.
John · McCluskey, CEO, Alamos Gold Canada: United States debt has grown to $35 trillion, at a rate of about $1 trillion every 100 days, and I think it's those factors that are driving attention to gold.
The latest report from the World Gold Council shows that aggregate global gold demand remained strong in Q2 and hit a record high. Total global gold demand reached 1,258.18t in Q2, up 4.2% y-o-y.
Global central banks continued to ramp up purchases, driven by a diversification of foreign exchange reserves, with central bank net purchases rising 6% y-o-y to 184t, although high gold prices weighed on jewellery spending in Q2, which fell 19% y-o-y to a four-year low of 391t.
At present, the market is also paying attention to the United States non-farm payrolls data for July, which will be released on Friday local time, which will affect the Fed's monetary policy, and the market expects the number to increase by 175,000.
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Editor: Angel