Gold price prediction: Gold rate peaks but experts cite 14-year old example to warn decline

Gold traded range-bound but positive, with gains of 0.38 per cent at $3,657 as the US Fed's policy supported the recent rate cut while keeping the door open for two more cuts based on incoming data, said analysts. Gold price continues to hold firm, with focus now shifting to next week’s key US data -- GDP, Manufacturing and Services PMI, and PCE Price Index -- which will guide further trends, the experts stated.

Gold Rate to Go Up Further?

On September 17, the spot gold prices touched an eye-watering $3,683 per troy ounce—an all-time high, and up 43 per cent this year. With the US labour data showing signs of softening, the Fed’s recent dovish comments have reduced the opportunity cost of holding gold, luring risk-averse investors into bullion.


Central banks, particularly in Asia, are stocking up, reducing reliance on the dollar, according to multiple media reports. Risk-averse investors increased their bets on bullion as a result of geopolitical developments, including Middle East tensions and Sino-US trade frictions.

Analysts, however, cautioned that the rally may be overextended and reminded investors that gold peaked in 2011 before entering a prolonged decline as speculative inflows reversed.

Traders will focus on next week’s US economic releases for insights into the Fed’s direction.

FAQs

Q1. How are central banks stocking gold?
A1. Central banks, particularly in Asia, are stocking up, reducing reliance on the dollar, according to multiple media reports. Risk-averse investors increased their bets on bullion as a result of geopolitical developments, including Middle East tensions and Sino-US trade frictions.

Q2. How has gold performed?
A2. On September 17, the spot prices touched an eye-watering $3,683 per troy ounce—an all-time high.