NEW YORK: Gold prices held above USD4,000 an ounce on Thursday as investors assessed the Israel-Hamas ceasefire deal, while broader geopolitical and economic uncertainty alongside expectations for US rate cuts sustained bullish sentiment towards the metal.
Silver hit the USD50 psychological level for the first time, bolstered by gold’s record-breaking rally, growing investor demand and a supply deficit.
Spot gold was steady at USD4,038.59 per ounce at 1226 GMT. US gold futures for December delivery fell 0.3 percent to USD4,057.70. Gold prices rose above USD4,000 per ounce for the first time on Wednesday, hitting a record high of USD4,059.05.
Silver was up 2.2 percent at USD50.01 per ounce. The metal has gained more than 73 percent this year, benefiting from the same factors as those driving gold’s rally as well as tightness in the spot market. “The interesting aspect about the silver market is that the net long positions are only modestly higher so this is not a rally based upon speculative interest.
It’s got some pretty solid fundamentals attached to this move in the silver price,” said independent analyst Ross Norman. US President Donald Trump announced that a ceasefire and hostage deal had been reached between Israel and Hamas under the first phase of his plan to end the war in Gaza. “Gold’s rally is facing resistance as the Gaza diplomatic breakthrough reduces risk-off flows, while the ongoing US dollar recovery undermines bullion’s strength, leaving it vulnerable to pullbacks,” said Nikos Tzabouras, Senior Market Analyst at Tradu. “However, the bullish bias remains intact, and the path to new all-time highs is still wide open.” The US dollar index hovered near a two-month high, making dollar-priced bullion more expensive for overseas buyers.
Geopolitical risks, including the Middle East crisis and the war in Ukraine, alongside strong central bank gold buying, ETF inflows, US rate cut expectations, and economic uncertainties stemming from tariffs, have all contributed to gold’s rally.
The metal has gained more than 53percent year-to-date and is on track to record the largest annual gain since the 1979 oil crisis. Federal Reserve officials agreed that risks to the US job market were high enough to warrant a rate cut, but remained wary amid stubborn inflation, according to minutes of the September 16–17 meeting released on Wednesday.