Gold bars. Yonhap News photo material

Bloomberg News predicted on the 28th (local time) that international gold prices are expected to continue their upward trend for the fourth consecutive month.

According to Bloomberg, as of 2:20 PM Korean time today, the spot gold price is showing an increase of 0.6% to $4,186 per ounce. It has risen by approximately 3% this week.

The possibility of interest rate cuts by the U.S. central bank, the Federal Reserve (Fed), is driving the rise in gold prices.

According to the CME FedWatch Tool, the federal funds rate futures market, at the same time, reflected an 85% probability of a 0.25 percentage point interest rate cut at the Federal Open Market Committee (FOMC) meeting scheduled for the 9th-10th of next month. This is a 46 percentage point increase from a week ago.

Bloomberg forecasts that gold prices will have risen in almost every month this year, achieving the highest rate of increase since 1979. The current gold price has surged by 60% compared to the end of last year ( $2,624 per ounce).

Continued large-scale purchases of gold by central banks worldwide, along with steady inflows of funds into spot gold exchange-traded funds (ETFs), have pushed gold prices higher.

However, after soaring to an all-time high of $4,380 on the 20th of last month, gold prices retreated to the $4,000 level and traded sideways for a while as the possibility of a Fed rate cut receded. Since then, gold prices have shown an upward trend again this week due to the renewed possibility of a rate cut.

Inflows into spot gold ETFs have shown a stagnant trend over the past four weeks.

Yonhap News