October 22, 2024 (Globalinvestorideas.com Newswire) Globalinvestorideas.com, a go-to platform for big investing ideas releases market commentary from Quasar Elizundia,Expert Research Strategist at Pepperstone.
Gold Holds Above $2,700: Can Its Momentum Last?
“The price of gold has remained above the $2,700 per ounce barrier today. This highlights the result of continued demand for safe-haven assets amid global uncertainty, increased geopolitical tensions on an international scale, and earlier expectations of aggressive interest rate cuts. Despite this momentum, I maintain my view that, in the short and medium term, this level will be difficult to sustain for gold trading.
One of the key factors that could limit gold’s progress is the recent increase in bond yields and the moderation in expectations of aggressive cuts by the Fed. This comparably less favorable environment will present a significant obstacle for the precious metal. Additionally, while a potential return of Donald Trump to the U.S. presidency could generate uncertainty, which is favorable for gold, his largely inflationary economic policies could negatively impact the metal by increasing inflationary pressures, raising interest rates, and consequently strengthening the dollar.
Although there are potential supporting factors, such as geopolitical conflicts or a more pronounced economic slowdown, at the moment I am not aligning with these factors to sustain gold’s rally. In this context, the market will be closely watching the U.S. presidential elections, which will be crucial in determining whether gold can maintain its momentum or face a correction.”
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