Could gold prices surge dramatically in October?

Gold has had a remarkable run this year, exceeding expectations and reaching new price milestones. Investors have turned to this traditional safe haven to hedge against inflation, thereby driving prices to new highs.

Gold prices have reached a new record high.

Specifically, according to Fxstreet, gold prices reached a new all-time high during the September 24th trading session in the US. This, coupled with a decline in US Treasury yields and a weakening of the dollar, fueled the price increase of this non-yielding metal. Gold's exchange rate against the USD (XAU/USD) traded at $2,662 after reaching a high of $2,664.

US consumer confidence declined in September, hitting its lowest level since August 2021, due to growing concerns about the labor market and the overall economic outlook.

Following the data, US Treasury yields edged lower, with 10-year Treasury yields reaching 3.73%, down two basis points. At the same time, the US Dollar Index (DXY), which measures the performance of the greenback against a basket of six currencies, fell to a two-day low of 100.48, down more than 0.42%.

Meanwhile, Fed Governor Michelle Bowman, a known "hawk," stated that inflation risks remain significant, indicating a preference for a "moderate pace of rate cuts" to prevent a resurgence of inflation.

Market observers are also almost certain that the Fed will cut interest rates by 0.25% at its November meeting, while the odds of a 50 basis point cut are 56.2%, according to CME's FedWatch Tool.

In related developments, the XAU/USD index is trending upward, although the rally appears to have been prolonged, with traders targeting $2,700/ounce. The momentum favors buyers despite the Relative Strength Index (RSI) having moved into overbought territory. Therefore, buyers should be wary of a potential pullback, Fx reports, citing expert analysis.

If the XAU/USD index extends its upward trend, traders could test the $2,675 level, followed by $2,700. Next would be $2,750 and $2,800.

Even as the economy changes, the gold rush shows no signs of slowing down. Recent developments, such as cooling inflation and the possibility of interest rate cuts, could boost the value of the precious metal in the coming months.

How high will the price of gold rise this October?

Experts are generally optimistic about gold in October, but specific price predictions remain mixed. With gold already trading above $2,500 per ounce, the question is whether prices will continue to rise or stabilize.

Kenny Zhu, an earnings research analyst at Global X ETFs, highlighted the wide range of forecasts. He stated, "We've seen bullish predictions of $2,600 to $3,000 per ounce, while bearish estimates have fallen to as low as $2,000 in the medium term." This disparity underscores the complex factors influencing gold prices.

Alex Ebkarian, CEO and co-founder of the precious metals trading firm Allegiance Gold, holds an optimistic view. He believes the price of gold could rise to $2,600, especially if interest rates fall. He explains that when interest rates are lower, "gold tends to become [more desirable than] bonds."

According to experts, factors influencing gold price forecasts can be a combination of economic, political , and global elements. Firstly, geopolitics: Ongoing conflicts and global tensions increase the appeal of gold as a safe-haven asset.

Next are inflation and monetary policy: Gold acts as a hedge against inflation, with its value influenced by the Fed. In addition, there is the strength of the USD: a weakening dollar makes gold more attractive to foreign investors.

In addition, there is the activity of central banks: National banks are buying gold on a large scale, especially in emerging markets, creating demand. Coupled with this are job market and recession risks: Economic instability can drive investors toward alternative assets like gold. Rising gold prices can be a sign of a struggling economy.

On the other hand, the upcoming US presidential election could lead to policy changes that affect financial markets. These factors interact in complex ways, creating a dynamic environment for gold prices.

In addition, the market has largely adjusted to recent economic developments, potentially setting the stage for gold to rise in October.

Source: https://doanhnghiepvn.vn/kinh-te/du-bao-gia-vang-co-the-tang-soc-trong-thang-10/20240926083256557