Investing.com – Gold’s rally is starting to look like it has stalled, according to HSBC, and the metal could fall further unless there is a serious geopolitical risk escalation.
rose to a record $2,685.42 per ounce on September 26 and is up about 28% so far this year – on track for its biggest annual gain in 14 years – fueled by the start of interest rate cuts by the US Federal Reserve and geopolitical tensions.
However, the lack of response so far Thursday to events in the Middle East could indicate that the gold market is becoming somewhat accustomed to news from that region.
However, at the moment there appears to be more ‘safe haven’ buying in the US dollar than in gold, HSBC analysts said in an October 2 note.
“Gradually, the case for a 50 basis point cut by the end of the year is outweighing expectations of a 75 basis point cut. This could weigh on gold,” HSBC added. “The comments from Fed officials could take on additional significance.”
The next major data, the September release, has the potential to push gold higher if results are disappointing.
While the ADP release was positive, there is no firm correlation between that report and the Labor Department data.
Beyond that, however, gold could move slightly lower as China – a major buyer – remains out of the market, the bank added.
