Despite yesterday's declines, gold records its longest bull run in 2024
Gold is marking its eighth consecutive week in gains, with prices rising slightly on Friday to settle at $3,975 per ounce, consolidating the longest bull run this year after hitting new record highs earlier in the week.
Market Dynamics and Fundamental Support
This strong performance comes amid a supportive environment of global economic uncertainty, bolstering expectations that the US Federal Reserve will begin cutting interest rates soon.
Recent comments from New York Fed President John Williams added further momentum after he expressed his openness to another rate cut, despite remaining cautious due to persistent inflation concerns.
The minutes of the latest Federal Open Market Committee meeting also revealed that policymakers are aware of the growing risks to the labor market but remain cautious about persistent inflation pressures.
Structural Support Factors
The fundamental pillars of gold's rally remain:
- Continued buying by central banks around the world.
- Continued trade tensions led by the Trump administration.
- Rising geopolitical risks.
- Increasing holdings of gold exchange-traded funds (ETFs).
- Strengthening expectations of further monetary easing from the Federal Reserve.
Immediate Context and Temporary Factors
The partial US government shutdown, now in its second week, has delayed the release of key economic data, adding another layer of uncertainty to the picture.
Technically, gold saw some declines yesterday after approaching the recent high of $4,060. This decline was driven by a strengthening US dollar and profit-taking from investors, especially after news of progress in ceasefire talks between the occupying entity and the resistance. We may see further downward corrections in gold in the coming period before another rally.
