Gold has recently surged back into record territory, breaking above $2,700 per ounce even as the market factors in the likelihood of no rate cuts from the Federal Reserve in November. Despite a 3% strengthening of the US Dollar since September 30, gold prices remain resilient and positive this month.
This unusual scenario raises the question: Could gold be heading toward $3,000? The current market dynamics are striking. Typically, a stronger USD results in weaker gold prices, as it becomes more expensive for foreign investors. Yet, both gold and the US Dollar Index (DXY) have each risen over 2% in recent weeks.
What might gold be signaling? A key argument for higher gold prices was the anticipated “Fed pivot.” However, in recent weeks, the prospect of a 50 basis point rate cut in November has been virtually priced out, with the odds of no rate cut approaching 10%. This shift in expectations has not deterred gold’s ascent.
At the same time, concerns about a recession have eased, following an unexpected drop in the unemployment rate to 4.1% in September. Just as the Fed indicated a weakening labor market, the data took a surprising turn. Yet, gold prices continued to climb, even as one of the primary catalysts turned bearish.
Technical analysis has played a significant role in this rally. A recent alert was issued to premium members when gold prices pulled back to around $2,620, and they are now enjoying gains as prices rebound above $2,700.
Another noteworthy trend is the decline in bond prices, coinciding with gold’s rally over the past three weeks. It appears that safe-haven demand is shifting predominantly toward gold rather than bonds, raising questions about investor confidence in US bonds.
As uncertainty looms heading into 2025, market participants are watching closely. For those interested in deeper insights, our latest analysis and price targets on gold, equities, and other commodities have been shared with premium members.
