Gold price surpasses $2,500 for first time ever

Staff Writer | August 2, 2024 | 8:19 am Markets USA Gold

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Gold surpassed $2,500 per ounce for the first time in history on Friday in the wake of rising geopolitical tensions and new data indicating a weakening US economy.

Gold contracts for December delivery reached an all-time high of $2,522.50 in the early trading hours, before shedding its gains to trade at $2,475.90 an ounce by 11:00 a.m. ET.

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Spot gold posted a marginal loss of 0.5% at $2,432.86 per ounce, having hit as high as $2,477.10 — just within grasp of its all-time peak of $2,483.73 set earlier this month.

Bullion has gained about 3% so far this week, on track for its best week since April, as rising safe-haven demand from Middle East tensions and expectations of rate cuts made the metal more appealing to investors.

Meanwhile, US 10-year yields dropped to their lowest since December and the dollar index hit its lowest since March after data showed that employers added fewer jobs in July than economists had forecasted, while the unemployment rate increased to 4.3%.

The data follows comments from Fed Chair Jerome Powell, who on Wednesday said that rates could be cut as soon as September if the US economy follows its expected path.

“The marketplace just now is factoring in a better-than-70% chance for a 50-basis-point cut by the Fed at the September FOMC meeting,” said Jim Wyckoff, senior market analyst at ***** Metals in a note to Reuters.

“Lower yields, some safe-haven buying and then the idea of a weakening economy which is bringing rates lower along with the dollar, all of those are in support of the gold market,” said David Meger, director of alternative investments and trading at High Ridge Futures.

(With files from Reuters)