Gold Suddenly Surges Past the 4,100 Mark! Price in Asian Markets Jumps Over $45 — What's Going On?
In Asian trading on Wednesday (July 22), spot gold prices suddenly surged sharply, with gold currently trading around $4,123/oz, up more than $45 intraday.
(Spot Gold 15-Minute Chart Source: 24K99)
FXStreet analyst Lallalit Srijandorn noted that gold prices moved higher during early Asian hours on Wednesday. In the previous session, the price of gold briefly fell to the psychological level of $4,000/oz before rebounding as global safe-haven demand increased.
Rising military tensions between the United States and Iran have further increased volatility in the commodities market, prompting traders to reallocate funds back into safe-haven assets such as gold. In addition, analysts stated that the current wave of buying is more due to an unchanged macro backdrop rather than new developments.
Ewa Manthey, commodity strategist at ING, said: "Today's price action looks more like buying on dips rather than a reaction to new headlines."
Currently, traders are still assessing the impact of escalating U.S.-Iran conflict. Since U.S. President Donald Trump announced a ceasefire agreement was "over," U.S. Central Command (CENTCOM) has launched airstrikes on Iran for the 11th consecutive night; meanwhile, Iran has attacked U.S. military assets in the Middle East, and its Houthi allies have declared a maritime blockade on Saudi Arabia.
Furthermore, continued attacks on Russia’s Black Sea coast have put additional pressure on the market. Russia’s Black Sea coast serves as an important transportation route for Kazakhstan’s oil exports.
The market will closely monitor developments in the Middle East to evaluate whether rising energy prices could further push up inflation and force the Federal Reserve to tighten monetary policy.
Due to the recent weak U.S. inflation data, swap traders believe the likelihood of the Federal Reserve raising interest rates at its upcoming meeting in July is low; however, the market has already fully priced in at least one rate hike before the end of this year.
Since reaching an all-time high near $5,600/oz in January this year, gold prices have pulled back significantly. However, after two consecutive weeks of declines, dip buyers have emerged, and gold is currently showing signs of support near the key psychological level of $4,000/oz.
(Screenshot source: Bloomberg)
Precious metals traders are weighing the impact of rising energy prices against weak U.S. economic data, as they look for clues about the Federal Reserve’s future rate path. Higher borrowing costs typically put pressure on gold, which does not generate interest income.
Amy Gower and other analysts at Morgan Stanley noted in a report: “Gold is struggling to find direction.” On the one hand, continued central bank buying is providing support for prices; on the other hand, exchange-traded funds (ETFs) are reducing gold holdings out of concern over a possible Fed rate hike.
However, Morgan Stanley analysts believe that as the market expects the Fed to eventually keep interest rates steady this year and resume rate cuts next year, gold ETFs may still flow back into the market.
Morgan Stanley analysts forecast that by the fourth quarter of this year, the price of gold will reach $4,450/oz, and the price of silver will rise to $65.40/oz.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Wall Street giants collectively raise rate hike forecasts, US Treasury futures continue to fall, gold drops over 1% to break 4000
After the US October CPI exceeded expectations, Goldman Sachs and Nomura added a forecast for an interest rate hike in March next year, while Deutsche Bank included a forecast for a rate hike in January next year. Currently, the market has fully priced in a 25 basis point rate hike in December, with a 13% probability for a 50 basis point hike. On Wednesday, the US Treasury spot market was closed, but Treasury futures continued to fall, with corresponding yields rising by about 2 to 4 basis points, and spot gold came under pressure, dropping by 1.1%.
No Need to Worry About the Cooling Down of AI Data Center Construction? The US Import Boom Is Unlikely to Subside in the Short Term, Real Impact May Come in 2029
It takes an average of 4.8 years from finalizing investment to starting construction of a data center project, and an additional 2.6 years from construction start to becoming operational. Servers usually cannot be installed until after the building structure and racks are completed. For trade partners such as Taiwan (China), South Korea, and Mexico who rely on US data center supply chain demand, the inertia in construction timelines provides at least a one- to two-year buffer for future exports.
Federal Reserve Major Debate: When Should the Tenure of “Number Three” Williams End?
The main point of contention is whether Williams should step down in June 2028, upon completing a full 10-year term, or in June 2027, when he reaches the mandatory retirement age of 65. Analysts point out that the Federal Reserve Board holds ultimate discretion; if he leaves early, Fed Chair Waller would be able to assert greater control over the appointment to this critical position. However, forcing Williams to shorten his term could easily be interpreted as political manipulation. Williams himself is expected to serve until June 2028.
Sunshine Silver weighs doubling mill capacity
Crypto prices
More
