Investing.com - Gold prices continued to head higher for a seventh-consecutive session Thursday as expectations that the U.S. will cut interest rates finally broke the precious metal out of its range-bound trade.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange gained $8.05, or 0.6%, to $1,341.65 a troy ounce by 10:24 AM ET (14:24 GMT), its highest level since Feb. 1.
Although safe-haven demand was supported by U.S. President Donald Trump’s plans to implement tariffs against China and Mexico, Ole Hansen, head of commodity strategy at Saxo Bank said that “weaker stocks and lower bond yields over the past few months were not enough to shake gold out of its established range”.
“What changed was the sudden acceleration is the market expectations for U.S. rate cuts,” he added. Lower interest rates lower the opportunity cost of holding the non-yielding metal.
But Hansen noted that the recent rally has brought gold to a strong resistance level between $1,350 and $1,380.
“We maintain the view that global growth momentum is slowing and likely to worsen further before renewed policy panic from global central banks will help to stabilize the outlook,” he said.
Hansen expects a period of consolidation until that materializes, before the yellow metal breaks out towards $1,480, a 50% correction of the 2011-15 selloff.
In other metals trading, silver futures rose 0.9% at $14.928 a troy ounce by 10:25 AM ET (14:25 GMT).
Palladium futures gained 1.5% at $1,347.00 an ounce, while sister metal platinum traded up 0.2% at $804.55.
In base metals, copper advanced 0.4% to $2.633 a pound.