Gold is Heading for Weekly Gains and Preparing to Move Toward this Record Level
Gold prices remained stable during Friday’s trading, heading for weekly gains amid optimism over potential interest rate cuts in the United States. Meanwhile, traders are awaiting Federal Reserve Chair Jerome Powell’s speech next week for signals on the extent of rate reductions.
U.S. economic data this week has eased recession fears, but traders remain confident that the Federal Reserve will cut rates in September. However, in the absence of a surge in safe-haven demand, it may require a drop in the dollar and bond yields for gold to reach the $2,500 level.
A low-interest-rate environment typically enhances the appeal of non-yielding bullion.
The minutes from the Federal Reserve’s July policy meeting are due on Wednesday, while Powell is set to discuss the U.S. economic outlook next Friday at the Jackson Hole symposium.
Gold and the Dollar Now Spot gold is holding at $2,456 per ounce, with prices up nearly 1% this week. Gold futures have risen 0.06% to $2,494.
On the other hand, the dollar index is down 0.05% to 102.77 points.
Other Metals Spot silver fell 0.8% to $28.16 per ounce, platinum dropped 0.1% to $951.95, and palladium slid 0.2% to $942.64. All precious metals are heading for weekly gains.
September Rate Cuts Gain Momentum Among U.S. Fed Officials
Two more Federal Reserve officials endorsed the idea of cutting interest rates next month on Thursday, as strong economic data have led financial markets to scale back bets on a larger-than-usual easing cycle in borrowing costs.
St. Louis Fed President Alberto Musalem and Atlanta Fed President Raphael Bostic were more cautious than many of their colleagues about cutting borrowing costs prematurely.
Speaking at an event in Louisville, Kentucky, Musalem said recent data “boosted my confidence” that inflation is returning to the Fed’s 2% target.
However, Musalem was quick to emphasize that the economy is still “functioning very well,” pointing to positive factors such as labor supply growth as part of the reason for the recent uptick in unemployment to a post-pandemic high of 4.3%.
Investors, who last week bet that the Fed would have to cut rates by half a percentage point at its September 17-18 meeting following weaker-than-expected labor market data, are now pricing in a nearly 75% chance of a quarter-point cut next month.
The reduced clamor for a large rate cut following encouraging inflation, unemployment claims, and retail sales data could allow Fed policymakers to proceed with their preferred gradual approach to rate cuts amid slowing inflation, rather than urgently responding to prop up the labor market.
The U.S. Labor Department reported this week that the annual increase in the Consumer Price Index slowed in July to under 3% for the first time in nearly three and a half years, while a slight rise in producer prices last month also indicated that inflation is firmly on a downward trend. Meanwhile, weekly jobless claims fell to a one-month low, and retail sales rose in July, confirming continued strength in consumer spending.
Shifting Expectations The Fed began raising its benchmark overnight lending rate in March 2022, pushing it from near zero to the current 5.25% – 5.50% range, where it has remained for the past year.
In an interview published by the Financial Times on Thursday, Bostic said he is open to cutting rates at the September meeting, marking a shift from his earlier expectations of a quarter-point rate cut in the fourth quarter of this year.
Bostic, who spoke before the latest jobless claims data, added that he would consider cutting rates by half a percentage point if the labor market weakens faster than anticipated.
Massive Cryptocurrency Thefts Reach $1.6 Billion in Record Time
The value of stolen cryptocurrencies through hacking operations nearly doubled to $1.6 billion during the first seven months of 2024, driven by rising crypto asset prices, according to a report by Chainalysis.
Despite the significant increase in the value of stolen assets, the number of hacks saw a slight rise, reaching 149 incidents this year, compared to 145 during the same period in 2023, the blockchain analytics firm reported.
Rising Digital Asset Prices Eric Jardine, Head of Cybercrime Research at Chainalysis, told Bloomberg News that the surge in stolen cryptocurrencies is partly due to the sharp increase in crypto asset prices in 2024.
Bitcoin saw a notable rise, reaching nearly $74,000 in March, buoyed by the launch of spot ETFs in the United States. Although volatility erased some gains, the currency has risen by 38% this year. Chainalysis reported that Bitcoin accounted for 40% of stolen cryptocurrencies this year.
In 2022, $3.7 billion in cryptocurrencies were stolen due to hackers exploiting security vulnerabilities, but that figure dropped to $1.7 billion in 2023 as security measures were bolstered and crypto token prices did not fully recover.
This year, the Asia-Pacific region has been the target of several high-profile attacks. In recent months, Japan’s DMM Bitcoin lost $301 million, while India’s WazirX was robbed of $235 million.
Centralized Platforms Targeted Again According to the Chainalysis report, hackers have returned to targeting centralized trading platforms after four years of focusing on decentralized platforms.
The report highlighted that groups linked to North Korea use advanced social engineering techniques to breach crypto asset platforms. U.S. authorities have previously linked North Korea to some of the largest crypto thefts.
Which Stock Should You Buy Next? With stock valuations soaring in 2024, many investors feel uneasy about putting more money into equities. Not sure where to invest your funds now? Explore our proven investment portfolios and discover high-potential investment opportunities.
In 2024 alone, ProPicks AI identified two stocks that jumped over 150%, four others that surged over 30%, and three more that rose by over 25%. That’s an impressive track record.
With portfolios specifically designed to track Dow Jones stocks, S&P stocks, tech stocks, and mid-cap companies, you can explore diverse strategies for building wealth.
