In a surge of 27% this year! Gold breaks through $2600 to hit a new high, analysts warn: a pullback is imminent.

Gold futures prices hit a new high again, closing above $2600 per ounce for the first time. It is widely believed that the 50 basis point rate cut by the Federal Reserve has increased the attractiveness of gold which does not pay interest. Analysts at Deutsche Bank said that expectations of further rate cuts in the coming months have kept gold prices rising, "as long as these expectations continue, gold prices should continue to rise." Forex.com analyst Fawad Razaqzada said: "Political risks like the ongoing conflicts in Gaza, Ukraine, and other regions will ensure that the safe-haven demand for gold is sustained." Due to investors seeking to hedge the uncertainty stemming from long-term conflicts in the Middle East and other regions, the price of this safe-haven asset has risen 27% in 2024, marking the largest annual increase since 2010. However, analysts at TD Securities believe that this record-breaking rally may see a pullback. Ghali said: "Clearly, there has been some buying activity as the Fed decided to start its easing cycle with a substantial rate cut." However, the source of this buying activity is still unclear, as ETF inflows have been relatively low and Asian buyers have not entered the market, indicating "extreme positioning." COMEX gold futures for the near month rose 1.2% on Friday, closing at a record level of $2619.90 per ounce. Silver futures for the near month rose 0.2% on Friday, closing at $31.176 per ounce, with both precious metals rising 1.5% this week. Analysts at Berenberg Bank said that as gold prices may remain at current levels, gold miners' earnings in 2024 and 2025 may exceed market expectations. Berenberg Bank stated that political conflicts and a dovish Federal Reserve continue to support gold prices, "high-quality gold mining stocks will not only generate strong free cash flow but also increase shareholder returns." The gold sector in the US stock market surged on Friday, with Paramount Gold Nevada (PZG.US) up over 16%, Osisko Development (ODV.US) up nearly 7%, US Gold Corp (USAU.US) up over 6%, Harmony Gold Mining Co. Ltd. Sponsored ADR (HMY.US) up over 4%, Gold Fields Limited Sponsored ADR (GFI.US) up over 3%, and Newmont Mining (NEM.US) up nearly 2%.