Is the Gold Rally Losing Steam? HSBC Warns of Possible Drop Unless Geopolitical Risks Escalate
The gold rally that saw prices soar to a record $2,685.42 per ounce may be losing momentum, according to HSBC. The precious metal, which has already gained around 28% this year, could ease further if there isn’t a significant increase in geopolitical risks.
Analysts at HSBC noted that more investors are turning to the US dollar as a safe-haven asset rather than gold, potentially putting pressure on the precious metal. The argument for smaller interest rate cuts by the Federal Reserve is gaining traction, which could further impact gold prices.
The upcoming release of September data could be a turning point for gold prices, with the potential to push them higher if the results are disappointing. However, with China, a major buyer, remaining out of the market, gold may face downward pressure in the near term.
In conclusion, investors should keep a close eye on geopolitical developments and Federal Reserve comments for clues on the future direction of gold prices. The upcoming data release could be a key factor in determining whether the gold rally continues or if a correction is on the horizon.