Gold Gains Marginally Above $2,500 as Silver Continues Run to $30

 

Gold Logs Modest Gains and Maintains Support Above $2,500

(Bullion News Network) – August 21st, 2024 at 2:10 PM CST – Gold prices etched out modest gains above the $2,500 line this morning as rate cut optimism continues to boost the precious metal’s appeal. The marginal run comes on the heels of yet another all-time high for gold. An intraday high of $2,530.30 on August 20th is the latest in a series of historic highs for gold bullion amid a politically unstable and economically uncertain year for the United States. 

Last Friday, gold broke the $2,500 barrier for the first time ever as traders priced in an all-but guaranteed September rate cut from the Federal Reserve. This quarter, the Federal Open Markets Committee (FOMC) has reiterated that it intends to cut interest rates once they have sufficient data that inflation is sustainably approaching the longstanding 2% target set by the Federal Reserve. An unexpected weakening in the U.S. labor market is another potential trigger for rapid rate cuts, said Federal Reserve Chair Jerome Powell at a press conference on July 31st. 

The Bureau of Labor Statistics’ Employment Situation Summary released on August 2nd showed that U.S. job creation slowed by more than expected, sending international markets into a tailspin and prompting calls for the Fed to execute an emergency rate cut. The U.S. central bank did not opt for an impromptu cut in August, but the labor market falloff, combined with another month of progress in curtailing inflation, makes a September interest rate cut all-but guaranteed. 

Gold prices continued to climb in the wake of renewed investor confidence in an upcoming interest rate cut, which drove the metal to a historic high of $2,530.30 yesterday. The metal corrected before market close and ended the day at $2,514.01/oz. Prices jumped marginally this morning, gaining only a few cents and pushing gold to $2,516 by midday. 

Silver Continues Run Toward $30, Gold-Silver Ratio Falls

Silver logged more substantive gains this morning, jumping nearly $.17 and making headway in its approach toward the pivotal $30 resistance. Maintaining support above $30 has been tricky for silver bulls this year, but silver remains up since January 1st – and ongoing supply deficits have made a solid case for its upside as an investment vehicle. 

Since August 14, silver prices are up by more than $2/oz. Silver jumped in correlation with gold’s record performance last week but has since outpaced the yellowish precious metal. The gold-to-silver ratio has dropped four points since August 14th, sliding from a local high of 88.82:1 to 84.82:1 today. This is the lowest GSR in August, and greater upward movement from silver could send the figure tumbling even lower. 

Later this month, key economic data reports should give traders a better idea of where metal markets are heading. September’s Federal Reserve meeting will likely culminate in a long-awaited rate cut, but just how much the Federal Reserve decides to ease rates will have a profound effect on gold and silver prices. 

BREAKING NEWS: There’s been a big drop in the latest US job figures. The Bureau of Labor Statistics (BLS) has cut its estimate by 818,000 jobs for the year to March 2024. So will there be a interest rate cut in September?

Look at what the futures market is pricing, in this data… pic.twitter.com/5hqDVPTTdM

— James Eagle (@JamesEagle17) August 21, 2024