New York August 16 2024: Gold has surged passed the US$2,500 per ounce mark for the first time as investors flocked to the yellow metal on growing expectations of an impending US base rate cut.
Bullion topped the mark to hit an all-time high of US$2,500.44 on Friday, before scaling back to US$2,483.38 in a 1.1% gain for the day.
This was after weak housing construction data in the US fuelled expectations that the Federal Reserve would cut interest at its next meeting in September.
Data on Friday showed new housing construction projects in the US fell by 6.8% over the course of July to 1.238 million, or by 16% on an annual basis.
“The underlying trend remains bullish […] there are little fundamental justifications for short selling gold,” City Index analyst Fawad Razaqzada commented.
“In fact, some would argue that gold remains undervalued given the big devaluation and loss of purchasing power fiat currencies have suffered across the world in recent years owing to high inflation.”
Money markets were left pricing in three-quarter of a point rate reductions for the US by the year end following the housing data, prompting the dollar to lose 0.27% against the pound.
