The spot gold price surged to its highest level in over a month, reaching $2,385.63 per ounce, as the market anticipated the Federal Reserve would cut interest rates in September 2024.
August gold futures also rose to $2,397.7 per ounce. Compared to a week ago, prices have increased by more than 2%.
Domestically, SJC gold bars are currently priced at VND 74.98-76.98 million/tael (buying-selling), stable compared to a week ago.
Employment in the US non-agricultural sector increased by 206,000 in June 2024, slightly higher than the 190,000 new jobs estimated by economists surveyed by Reuters, but lower than the May 2024 increase.
The US employment growth for May 2024 was revised downward to 218,000 from the previously announced 272,000, while the April 2024 growth was adjusted downward to 108,000 from 165,000. The unemployment rate rose to 4.1%, slightly higher than the estimated 4.0%.
With the slowdown in the US job market, there is growing expectation that the Fed will cut interest rates for the first time in September, earlier than the previous prediction of December 2024; followed by another rate cut in December 2024.
Therefore, bullish speculators are contemplating the possibility of gold prices returning to their all-time high of $2,450 if the Fed starts signaling rate cuts in September, with the probability of this scenario reaching about 72%.
Gold prices rose to their highest level in over a month.
 This week’s Kitco News survey showed that almost all experts expected gold prices to rise next week, and the sentiment of retail investors also turned positive.
Adam Button, head of currency strategy at Forexlive.com, said that the political environment is creating a particularly strong push for gold prices. He stated, “We (the gold market) may be living through one of the greatest moments of all time in terms of politics in the US.” “It takes a lot of time for US politics to affect gold.”
Colin Cieszynski, Chief Market Strategist at SIA Wealth Management, said he was unsure if the weak US employment data would increase the likelihood of a Fed rate cut, but the weakness in other asset classes is creating a new upward momentum for gold. “The Fed has been fairly clear in indicating that they will only cut rates once this year, possibly before the election, possibly after, and that inflation is still happening in many places,” said Mr. Cieszynski.
Marc Chandler, CEO of Bannockburn Global Forex, stated, “I believe gold prices will climb higher next week due to the expected rate cut and the projected slide in the US dollar.” “Momentum indicators on gold price charts are favorable, and the 5-day moving average has crossed above the 20-day moving average.”
Darin Newsom, Senior Gold Market Analyst at Barchart.com, also foresees further gold price increases in the near term. He commented, “Gold has risen for two consecutive weeks, setting the stage for further gains next week. While the medium-term trend is uncertain, prices will climb in the short term.”
Analysts from CPM Group recommended buying gold, anticipating the next target to be $2,410. They wrote, “Gold prices could rise over the next few weeks before potentially pulling back.” “The market is increasingly supported by the political environment in the US, Europe, the Middle East, and many other parts of the world. There seems to be growing concern about President Biden’s chances of re-election. This heightened uncertainty is supportive of gold prices. As the Democratic Party seeks a replacement candidate, it will add to the uncertainty and cause investor anxiety, which could be reflected in gold buying.”
They added, “Economically, the world continues to grow, but slowing economic output in many countries and regions is creating deep concerns about the near-term economic trend.” “Additionally, the market is increasingly expecting that interest rates could fall in the coming months. Inflation has cooled, and the unemployment rate has risen only slightly.” They concluded, “Prices are currently in an uptrend before pulling back later.”
Mark Leibovit, analyst at VR Metals/Resource Letter, was the only one this week with a contrary prediction. “The risk for gold in the coming weeks (possibly months) is that prices could retreat back to the $2,000 level.”
This week, 12 Wall Street analysts participated in the Kitco News Gold Survey, and the majority expressed optimism. Ten analysts, representing 83%, expected gold prices to rise next week, while one analyst, or 8%, predicted a price decline, and one analyst saw a sideways market.
Meanwhile, 164 votes were cast in the online Main Street poll, with 108 people, or 66%, predicting that gold prices would rise in the next week. 26%, or 16% of voters, expected prices to fall, while 30 people, or 18%, envisioned a sideways market.
Kitco News survey results on the outlook for gold prices for the week of July 8-12.
 The US central bank will remain in focus next week, with Fed Chairman Jerome Powell testifying before the Senate Banking Committee on Tuesday (July 9) and the House Financial Services Committee on Wednesday (July 10).
Markets will also pay attention to the US June CPI and weekly jobless claims on Thursday (July 11), followed by the release of the US June PPI on Friday (July 12), and the preliminary survey of consumer sentiment by the University of Michigan.
Reference: Kitco News
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