Gold Nears Record High on ETF Inflows, Fed Rate Expectations

Gold is on track for a fourth consecutive weekly gain, driven by expectations that the Federal Reserve will lower US interest rates, which has weakened the US dollar and reduced Treasury yields. Prices surged to record levels above $3,650 an ounce, supported by strong inflows into bullion-backed exchange traded funds (ETFs) and geopolitical uncertainties. The precious metal has rallied nearly 40% this year, outpacing other commodities and benchmarks such as the S&P 500, with some analysts and institutions, including UBS and Global X, projecting even higher prices, with targets up to $4,000 an ounce. President Donald Trump has influenced market sentiment by advocating for lower policy rates, further boosting gold's appeal as a hedge against currency depreciation. Despite the strong rally, some analysts caution that the traditional seasonal strength of gold in September has been inconsistent in recent years, suggesting that price action may remain volatile. Australian gold ETFs, in particular, are experiencing record inflows, reflecting a broader trend of investor interest in precious metals amid expectations of continued rate cuts and inflation concerns.