DIGIVESTASI - Gold prices surged on excitement over China's stimulus measures, surpassing $2,400, the highest closing price ever. Positive sentiment towards gold prices is also still influenced by expectations of a US interest rate cut.  Gold prices on the spot market closed at USD2,376.44/troy ounce on Thursday (May 16, 2024). Prices fell 0.4%. This weakening was bad news after gold strengthened 1.19% in the previous day's trading session.  Gold prices rallied as markets closed this week, Friday (May 17). The precious metal closed at $2,414.89 per troy ounce. The price rose 1.6%.  

According to Reuters, the sharp rise in gold prices coincided with the rise in prices of other precious metals, such as the price of silver, which surpassed the psychological threshold of 30 USD and reached its highest level in 11 years. 
“Gold rose despite the rising value of the dollar and yields. “I think in this case, the Chinese stimulus has helped because we've also seen other base metals perform very well,” said Bart Melek, chief commodity strategist at TD Furniture Securities. 

Markets were boosted after China, a major consumer of industrial metals as well as gold, announced “historic” measures to stabilize its crisis-hit real estate sector. Spot gold prices increased more than 2% this week. Meanwhile, the benchmark gold price in London ended the week at a record high of $2,402.60 per troy ounce, the London Bullion Market Association (LBMA) said. 

“Ultimately, gold is reacting to the idea that inflation in the US can be controlled... The discussion about prolonged high interest rates will subside,” Melek added.  

Traders expect the Federal Reserve to cut interest rates by about two-quarters of a point this year, with a likely rate cut in November likely to boost bullion's appeal but not its profitability. 

Spot silver prices rose 4.8% to $31.02 per troy ounce after overcoming a key resistance level at $30. The last time silver was above $30 was in early 2021, but it is difficult to maintain this level for more than a decade. “Every time we talk about Chinese stimulus, it benefits the platinum market,” Melek said. Platinum prices rose 2.3% to $1,081.37, after hitting a one-year high on Thursday. The metal has surged 9% this week as the structural deficit continues. 

Palladium also increased 1.2% to $1,007.

Find more news and articles on Google News