As the world’s leading investment manager and financial market journalist, I bring you the latest updates on the gold market. Gold prices have dropped by 5% from their peak on July 17 to $2,364, following a stronger-than-expected US GDP report and growing certainty of a Fed rate cut in September. This has led to a decline in gold prices and a surge in the US Dollar.
The US economy performed better than anticipated in the second quarter of 2024, causing a 1.30% drop in gold prices. Market experts attribute this decline to profit-taking, alongside a decrease in US Treasury yields and a firm US Dollar. The US GDP for Q2 surpassed expectations, while the number of Americans filing for unemployment benefits decreased.
Investors are now almost certain of a quarter-point interest rate cut by the Federal Reserve in September, as indicated by the CME FedWatch Tool data. This has further impacted gold prices, pushing them to a two-week low.
Analysis and Breakdown:
In summary, the strong US GDP performance and expectations of a Fed rate cut have caused gold prices to plummet by 5%. This has created a ripple effect in the market, with the US Dollar strengthening and investors adjusting their strategies accordingly. The upcoming Fed meeting in September is now highly anticipated, as it could further influence the direction of gold prices and market dynamics.