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Gold prices just won’t stop rising. Futures tied to the precious metal hit an intraday record on Monday, reaching $2,617.40 per ounce. Year to date, gold is up nearly 26% — outpacing the S & P 500’s 18% gain. That advance also puts the commodity on pace for its biggest annual increase since 2010, when it surged nearly 30%, FactSet data shows. That strong performance comes as investors widely anticipate the Federal Reserve will start cutting interest rates Wednesday, and with inflation easing from the high levels seen just two years ago. The central bank is expected to lower benchmark rates by at least 25 basis points, or a quarter percentage point, from their current range of 5.25% to 5.50%. The CME Group’s FedWatch tool shows traders are pricing in a 65% probability of a half percentage point decrease. Goldman Sachs expects the momentum in gold to continue. @GC.1 YTD mountain Gold year to date “While we see some tactical downside to gold prices under our economists’ base case of a 25bp Fed cut on Wednesday, we reiterate our long gold trading recommendation and our price target of $2,700/[troy ounce] by early 2025 given structurally higher central bank demand, the gradual boost from rate cuts, and gold’s hedging benefits against geopolitical, financial and recessionary risks,” Lina Thomas, commodities strategist at Goldman, wrote in a note. Thomas added: “Fed rate cuts are poised to bring Western capital back into gold ETFs, a component largely absent [from] the sharp gold rally observed in the last two years. Since ETF holdings only increase gradually as the Fed cuts, this upside is not yet fully priced in.” Investors seeking exposure to gold can obtain it through exchange traded funds, such as the SPDR Gold Shares ETF (GLD) . The fund, which tracks gold prices and charges 0.4% in fees, is up nearly 25% in 2024. Other ETFs investors can consider are the VanEck Gold Miners fund (GDX) , with an expense ratio of 0.51%, and the VanEck Junior Gold Miners ETF (GDXJ) , with an expense ratio of 0.52%, which have soared more than 28% and 29% respectively, year to date. Elsewhere on Wall Street this morning, Citigroup trimmed its price target on Micron Technology ahead of next week’s earnings report. “We expect the company to post results and guidance below consensus driven by legacy DRAM weakness,” analyst Christopher Danely said in a note . “While it appears there has been an inventory build in DRAM in the PC and handset end markets, we believe this should finish by the end of the year.”
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https://www.cnbc.com/2024/09/17/golds-rally-to-records-shows-no-signs-of-slowing.html
