Today, not much is happening with the yellow metal, with gold prices (XAUUSD) trading within a consolidation range that extends from the $1510.8 floor to the $1526.83 ceiling.
There isn’t a lot going on at the moment to drive risk on/off sentiment, which is why the safe-haven assets of gold, JPY, and CHF have been relatively quiet today.
However, a Bloomberg report revealed that several investment funds are beginning to find their way into gold-backed ETFs. The global count of funds in exchange-traded funds that are backed up by gold is expected to hit new records in a few weeks.
Outlook for Gold Prices (XAUUSD)
Near-term influences on gold prices will come from trade headlines and the rising tensions in the Middle East over the Saudi Aramco attacks. The US will ramp up its military presence in the Gulf region and Iranian military commanders have been talking tough. Elevating global stress are trade talks between the US and China which are due in two weeks.
Gold demand may also be driven by the fall in interest rates across the developed markets. However, this may be more of a medium-term price driver. In the last few weeks, the ECB and Federal Reserve cut interest rates which lowers the cost of holding gold. High-interest rates tend to have the opposite effect as people prefer holding dollars to receive a positive yield.
A break above the $1526 range ceiling at $1526.83 could trigger traders to target the August 26 high of $1554.88, while a downside break of the floor price of $1510.8 might send gold prices to the August 13 low at $1482.10.