Gold Rallies Toward ATH of $2.450 As Trump’s Wining Odds Grow

Gold surged nearly $40 on Thursday, breaking above the $2,400 and after the consolidation on Friday, it has resumed the uptrend again today. The jump came after U.S. consumer prices (CPI) posted a third consecutive last month, ending the uptrend in Q1 and boosting bets for two Federal Reserve interest rate cuts in 2024.

Spot gold rose 1.8% to $2,424.54 per ounce on Thursday, its highest level since May 22, while today Gold buyers are back at it, pushing the Gold price $20 higher and getting closer to the all-time high. Although, even if we don’t reach that level today, we might have a record close, since the price closed at $2.425 back on May 20.

As XAU edges closer to the previous record high, a fresh wave of interest has emerged. In the past few minutes, gold prices have surged by more than $20 to reach $2437.30, marking the second-highest level. Today, it seems that Gold buyers are driven by expectations surrounding bonds, a potential Republican sweep, and the anticipation of increased government spending and deficits.

Additionally, the ongoing trade disputes and tariffs bolster the argument for some countries to boost their gold reserves, particularly China. The all-time high of $2450 was achieved in May. Some might think that Trump’s decision to end the conflict in Ukraine would negatively impact gold, since it would remove a major risk premium. However, given Trump’s unpredictable nature, as we’ve seen in the past, this unpredictability could be exactly what is driving Gold’s current bullish price action.

New York Fed Manufacturing Index for July 2024

• The New York Fed manufacturing index for July stood at -6.6 points, slightly better than the estimated -7.0 points
• Lower than the previous month’s -6.0 points.

Key figures from the report include:

• New Orders: -0.6 points compared to -1.0 points last month
• Prices Paid: +26.5 points versus +24.5 points in June
• Employment Index: -7.9 points compared to -8.7 points in June
• 6-Month Business Conditions Index: +25.8 points versus +30.1 points in June (June marked a two-year high)

Additional details reveal:

• Shipments: 3.9 points compared to 3.3 points last month
• Prices Received: 6.1 points versus 7.1 points last month
• Unfilled Orders: -11.2 points compared to 1.0 points last month
• Delivery Time: -9.2 points versus -4.1 points last month
• Inventories: -6.1 points compared to 1.0 points last month
• Average Employee Workweek: -0.1 points versus -9.9 points last month
• Supply Availability: 0.0 points compared to -1.0 points last month

6-Month Forward Outlook:

• New Orders: 20.8 points versus 30.0 points last month
• Employment: 5.8 points compared to 9.4 points last month
• Prices Paid: 39.8 points versus 37.8 points last month
• Prices Received: 27.6 points versus 22.4 points last month
• Shipments: 25.3 points compared to 28.7 points last month

While the headline figure was close to expectations and the previous month, new orders and prices paid increased compared to last month. Despite the rise, employment and new orders remained in negative territory. Prices paid and received are approaching levels seen before the pandemic.

 XAU Gold Live Chart