Gold quotes hit new highs

Gold prices on the world market rose above $2,050 per troy ounce, hitting a seven-month high. Over the week, the precious metal increased in price by almost 3%. In many respects, the bullish move is associated with hopes for the end of the Fed rate increase cycle, in favor of which an increasing number of representatives of the American regulator are speaking out. Analysts believe that a further increase in metal quotations will not be significant, and do not rule out a fall in prices by the end of the year to $1.9 thousand.

According to Investing.com, gold prices on the world market on November 29 rose above $2,050 per troy ounce for the first time in seven months. During trading, the price reached $2,052 per ounce, the highest since May 5. This is 0.6% higher than Tuesday’s close. Even taking into account the correction and return to $2,046 per ounce, prices remained 2.8% higher than a week ago.

The cost of gold is increasing against the backdrop of multidirectional price dynamics of other precious metals.

Thus, the price of silver reached $25.26 per ounce, which is almost 7% higher than the value of a week ago. Platinum quotes rose only 1.3%, to $935.4 per ounce, palladium lost 3.3% in price, to $1022.3 per ounce.

A confident increase in the price of gold occurs against the backdrop of moderately negative statistics on global economic growth and business activity. Stock market expert at BCS World of Investments Valery Emelyanov points out that in recent weeks there have been signals about a slowdown in growth in the US and Europe, and China is also showing rather weak figures. In particular, on Monday, data was published on sales of new homes in the United States, which in October decreased by 5.6% compared to the previous month and amounted to 679 thousand at an annual rate.

Against this background, an increasing number of Fed representatives are talking about the imminent end of the stage of high rates and hinting at their imminent reduction. On Tuesday, one of the most hawkish members of the Federal Reserve Board of Governors, Christopher Waller, said that the regulator could begin lowering the discount rate if inflation slows further in the coming months. “As a result, investors are changing their expectations – on Wednesday, the probability that a decline will occur in March is 44%,” notes Anna Pilgunova, senior analyst for commodity markets at SberCIB Investment Research.

The backlog of platinum and palladium is due to weaker-than-expected data on the Chinese economy – the main consumer of metals is the automotive industry.

Profits at the country’s industrial enterprises increased 2.7% year-on-year in October, lower than the gains in September and October and less than expected. “Investors do not consider platinum and palladium as risk-free assets, so the price increase here did not follow the price of gold,” notes Dmitry Smolin, senior analyst at the Sinara investment bank.

On the Moscow Exchange, the price of gold on the spot market rose on Wednesday to 5.68 thousand rubles/year. This is 2.5% higher than the closing values ​​of the previous Wednesday. In addition, quotes have only returned to the values ​​​​of two weeks ago. The less rapid recovery of ruble prices is due to the weakness of the American currency on the Russian market, which was observed in October and until the first half of November. “In rubles, the picture is mixed, since the authorities are trying to strengthen the ruble against the dollar or at least keep it at current levels,” notes Valery Emelyanov.

Further dynamics of gold prices on the world market will depend on statements by US financial authorities.

Anna Pilgunova notes that the nearest resistance level is $2070 per ounce, which can be tested if the US Federal Reserve maintains its soft stance. At the same time, the focus of attention in the coming month will be on the results of the Fed meeting in December and the rhetoric of its representatives after the meeting. By the end of the year, Ms. Pilgunova believes, we can expect a drop in gold prices to $1,900 per ounce “amid a decline in geopolitical risks and a strengthening dollar.”

Vitaly Gaidaev