The Gold price started the new trading week where it left off the previous week, with a rise to a new record high of currently $2,740 per troy ounce. The 2.4 percent rise in the last week was already the fifth in the past six weeks, Commerzbank’s commodity analyst Carsten Fritsch notes.
Gold rises more than 30 percent since January
“Since the beginning of the year, the Gold price has risen by more than 30 percent. As things currently stand, that would be the strongest annual increase in 45 years. The price increase in recent weeks is also noteworthy because the US dollar has appreciated by more than 3% on a trade-weighted basis since the end of September and expectations of interest rate cuts by the Fed have been significantly scaled back.”
“The usual price drivers, namely the US dollar and interest rate expectations, can therefore no longer be used to explain the recent strength of the Gold price. Instead, the tensions in the Middle East, and in particular the conflict between Israel and Iran, as well as the uncertainty in the run-up to the US elections in two weeks' time, can be cited as reasons. Another argument is the current positive market sentiment towards Gold.”
“On Friday, the CFTC reported an increase in speculative net long positions for the week ending 15 October, following a reduction in positions in the previous week in the wake of the price decline. Bloomberg reported inflows into Gold ETFs on all five trading days last week, totalling almost 13 tons. Yesterday, another 5 tons were added. However, we also see signs of exaggeration in the current price increase, so a correction seems overdue. The relative strength index (RSI) is now in overbought territory.”
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