Gold Rides on Rate Cut, Inflation Fears to Reach New Record High

At the start of this week, the price of gold surged to a new high driven by increasing expectations of further reductions in U.S. rates of interest and growing geopolitical tensions. Gold futures hit $3,787.80 an ounce while the metal’s spot price increased to $3,750.45 a troy ounce. 

During periods of uncertainty, investors often turn to precious metals like gold as safe haven assets due to their historical ability to preserve value and hedge against market volatility and inflation. Given the current environment, what with Russia’s invasion of Ukraine, Israel’s sustained assault on Gaza and mounting inflationary concerns, it comes as no surprise that the metal has rallied. 

One senior analyst, Ipek Ozkardeskaya, explains that the primary drivers of the precious metal’s current momentum are the ongoing conflicts in Gaza and Ukraine. Ozkardeskaya notes that as more developed countries recognize the state of Palestine, relations with the United States and Israel are becoming more strained. 

Over in Europe, she continues, nations close to Russia’s borders are worried that the Kremlin may be challenging NATO’s resolve by consistently breaching airspace boundaries. President Donald Trump criticizing the Federal Reserve doesn’t help either, with fears that he could drive up borrowing, only making gold more attractive to traders and investors. 

Latest figures show that central banks globally have significantly increased their gold purchases this year as many countries work to decrease dependence on the greenback and diversify their reserves. 

Despite ongoing support for gold in the broader market, there is speculation that the rally may stall soon. 

In other news, prices of oil dropped following an agreement between Kurdish authorities and the federal government of Iraq to restart crude oil exports through the Turkish port of Ceyhan. West Texas Intermediate futures dropped to $62.02 per barrel while Brent crude futures saw prices hit $66.23 a barrel. 

This is a huge move as exports from the Kurdish region had been stopped over a year ago following legal and political disputes. The prospect of these exports resuming has raised fresh concerns about an oversupply scenario, particularly at a time when demand outlooks remain uncertain amid slowing global economic growth and high interest rates. 

The agreement will see roughly 230,000 barrels per day of crude being supplied into the global supply chain, an amount significant enough to influence short-term pricing trends. As markets digest both the rally in gold and the potential increase in oil supply, investors remain cautious, closely monitoring central bank decisions and geopolitical flashpoints that could shift asset flows dramatically. 

Exploration companies like Torr Metals Inc. (TSX.V: TMET) will be tracking the price direction of gold closely as this could influence investor interest in their stocks. 

NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (TSX.V: TMET) are available in the company’s newsroom at https://ibn.fm/TMET 

About MiningNewsWire

MiningNewsWire (“MNW”) is a specialized communications platform with a focus on developments and opportunities in the Global Mining and Resources sectors. It is one of 70+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled recognition and brand awareness.

MNW is where breaking news, insightful content and actionable information converge.

To receive SMS alerts from MiningNewsWire, text “BigHole” to 888-902-4192 (U.S. Mobile Phones Only)

For more information, please visit https://www.MiningNewsWire.com

Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer

MiningNewsWire
Los Angeles, CA
www.MiningNewsWire.com
310.299.1717 Office
Editor@MiningNewsWire.com

MiningNewsWire is powered by IBN