Impact of Rate Cut Expectations and ETF Inflows on Stock and Gold Markets
Recently, the New York stock market has experienced an upswing driven by a decline in bond yields, especially as the market anticipates upcoming employment reports. The S&P 500 index reaching its all-time high reflects the market's optimism regarding potential interest rate cuts by the Federal Reserve. The likelihood of a rate cut at the September FOMC meeting stands at 99.4%, with a historic inflow of $49 billion into bond ETFs, indicating a buoyant bond market.
Gold prices too have reached historic highs, with market analysts attributing the rise primarily to expectations of interest rate cuts and significant ETF inflows. LS Securities has stated that the potential for further increases in gold prices is substantial, while uncertainties related to policy changes within the Federal Reserve could further support these price increases. Additionally, worries about inflation have kept long-term bond yields at elevated levels.
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Gold Breaks All-Time High… "Mid-to-Long Term Uptrend Valid" [LS Securities] - Business PlusLS Securities stated in their report on the 5th that gold prices, which surpassed $3,600 per ounce and reached a historical peak, could continue to rise. It is analyzed that the gold price, which had been forming a range over the past four months, is showing an uptrend due to a combination of factors such as expectations for a U.S. interest rate cut and inflows into Exchange Traded Funds (ETFs). On the 3rd (local time) at the New York Commodities Exchange, the nearby gold futures price set another record high, rising 1.20% ($43.30) to $3,635.50 per ounce compared to the previous session. It has been on an upward trend for six consecutive trading days since August 26. Hong Sung-ki, an analyst at LS Securities, commented on the recent gold price