EBC Markets Briefing | Bullion meanders after Powell’s dovish remarks

Gold hovered around its all-time peak hit last week on Monday, fuelled by fund inflows and rate cut optimism. Powell’s dovish tone delivered in Jackson Hole boosted hope for sizable loosening.

Geopolitical tensions still lingered. The top US general began an unannounced visit to the Middle East on Saturday to discuss ways to avoid any new escalation in tensions that could spiral into a broader conflict.

But Hezbollah launched hundreds of rockets and drones at Israel on Sunday, as Israel's military said it struck Lebanon with around 100 jets to thwart a larger attack, in one of the biggest clashes in border warfare.

Holdings of physically backed gold ETFs have risen by more than 90 tonnes since May, according to data from the WGC. Net inflows were positive in seven of the past eight weeks.

The metal’s latest push from about $2,300 in June to new heights appears to have been driven by US and European buyers positioning for lower borrowing costs after China’s demand waned.

Gold investor sentiment looks set for the upside in the three to six months window, Citi analysts said in a note, predicting a $3,000 target by the middle of 2025, and a Q4 average price forecast of $2,550.

Bullion managed to stay above $2500, signalling that bullishness is alive. It will likely head towards the record high and 50 EMA could put a floor under its price in case of a pullback.

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