Gold prices surge on dovish Fed hopes, geopolitical tensions

US jobless claims fuel rise in gold prices: gram gold at ₺2,443 and ounce gold at $2,355, up 2%

Gold prices in the free market started the day with a gram of gold at ₺ $2,443 ($75.7) and an ounce of gold at $2355, up nearly 2% in the last 24 hours. The ounce reached its highest level in two weeks.

The increase is attributed to rising expectations of a “dovish Fed” as U.S. jobless claims exceeded forecasts, increasing the attractiveness of gold. Notably, breaking the $2,355 level for the ounce could encourage further buying.

As geopolitical tensions ease, the previously stagnant gold is experiencing considerable movement. Market dynamics, including the U.S. Federal Reserve’s interest rate policies and the strength of the dollar, remain important factors.

Thursday’s weekly jobless claims in the U.S. significantly exceeded expectations, reaching 235,000, signaling weakness in the labor market. This could prompt the Fed to cut interest rates and support gold prices.

On May 10, gram gold opened at ₺2,435 in the free market, while prices in the Grand Bazaar fluctuated between ₺2,435 and ₺2,495. This is an increase of about 1.9% compared to the lowest level in recent days. In jewelry stores, quarter gold is sold for ₺40,050, half gold for ₺8,102 and full gold for ₺16,130.

Ounce gold started the day at $2355 globally, with a rise of more than 2% compared to Thursday.

Analysts stated that the stable dollar in the country curbed the rise of gram gold and suggested levels below ₺2,400 as a buying opportunity for medium and long-term investors.

U.S. data remains important for ounce gold, and the focus is on the April consumer price index (CPI) figures, which will be announced next week. Despite the recent rise in gold, the support from the U.S. dollar index (DXY) and bond yields is not comprehensive. Despite the 2% rise in gold, the 2-year bond yield remained above 4.8%, and the DXY showed a limited decline from 105.7 to 105.3.

Key levels to watch in gold include the 22-day average at $2,355, which represents a critical resistance level for an ounce of gold. While a sustained breach could lead to increased purchases, $2,320 is emphasized as the first support.

Gold market specialist Mehmet Ali Yıldırımturk believes several factors are converging to buoy gold demand. Ongoing geopolitical tensions and inflationary pressures are creating a safe-haven bid for the precious metal. Yildirimturk also sees the Federal Reserve’s expectations of future interest rate cuts as contributing to a positive medium and long-term outlook for gold prices.

Source: Newsroom