Gold prices top $2,000 an ounce, on track for highest finish since July

By Myra P. Saefong

Gold futures climbed Tuesday, topping $2,000 an ounce and headed for their highest finish since late July.

Strong central bank buying of the precious metal, along with signs of easing U.S. inflation that lifted expectations for an end to the Federal Reserve’s interest-rate hikes, provided the support the precious metal needed to trade above that key price level.

“Gold is seeing a pattern of strong buying demand coming out of Asia with India importing significantly more gold in October than was forecasted last month,” said Peter Spina, president of GoldSeek.com, told MarketWatch.

Read: Global central-bank gold purchases reach a record high for the first 9 months of the year

Gold imports to India surged in October to a 31-month high as “global central banks kept up their strong buying interests,” Spina said.

“Combine that with rates coming off recent highs, hope for a Fed pivot and a weaker U.S. dollar last month, gold is positioned very well to make a significant move above $2,000 an ounce now and challenge record price highs,” he said.

Gold for December delivery (GCZ23) (GC00) climbed $26.70, or 1.3%, to $2,006.90 an ounce on Comex. Prices for a most-active contract haven’t ended a session above $2,000 since Oct. 30. A settlement around the current level would be the highest since July 31, FactSet data show.

Gold has already seen record price highs in foreign currencies, Spina said. Aa breakout move to record gold price highs in the U.S. dollar will “ignite another wave of buying interest, including the mostly absent Western gold buyer.”

Spina said he believes gold is in an “excellent position” to make a move to record highs, though most gold price observers have “lost faith.”

“Once the Western gold buyer joins many other parts of the world, we could see an aggressive breakout price move” towards not just $2,500 an ounce, a popular price forecast, but higher to $3,000 and beyond, he said.

Prices for most-active gold futures climbed to a intraday record high of $2,089.20 on Aug. 7, 2020 and an all-time settlement high of $2,069.40 on Aug. 6, 2020, according to Dow Jones Market Data.

Gold has been “recovering consistently since the beginning of October, while monetary policy expectations shifted and bets on another interest rate hike abated,” said Mohamad Ibrahim, group chief executive officer at XS.com, in emailed commentary.

Recent economic data “reinforced gold’s performance,” he said. The lower-than-expected readings on U.S. inflation data last week “cemented” the idea that no more interest-rate hikes would occur this year and “fueled expectations that interest-rate cuts could happen sooner than previously expected.”

The U.S. cost of living was unchanged in October, according to data released Nov. 14, while core consumer prices edged up by 0.2% that month. Meanwhile, on Tuesday, a reading on the U.S. leading economic index showed a decline of 0.8% in October, down a nineteenth month in a row.

Gold’s price move has been “tempered on multiple attempts to breakout to new highs,” said Spina. “The pent up energy in gold is ready to be unleashed.”

“The pent up energy in gold is ready to be unleashed.”Peter Spina, GoldSeek.com

He said “geopolitical risks are represented in huge gold buying interest by a multitude of global central banks.”

“Interest rates coming off highs, with inflation not coming down to desired targets will just add pressures to the gold price going forward,” said Spina.

-Myra P. Saefong

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11-21-23 1047ET

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