Gold Hits New Record Prices, LBMA Forecast Out by 34%
Wednesday, 10/16/2024 16:27
The PRICE of GOLD rose to new all-time records in all major currencies yet again on Wednesday, topping by more than one-third where attendees of the bullion industry's annual LBMA conference last year forecast it would trade today as China's stock-market rebound faded and new inflation data pointed to further Western central-bank interest rate cuts ahead.
Average mid-prices across the spot gold market in London – heart of the global bullion industry's trading and storage network – this morning retouched late-September's record of $2685 per Troy ounce.
The City's 3pm benchmark auction then fixed around $2673, topping 26th September's record by $5 per ounce.
Year to date, gold bullion in Dollar terms has now risen by 28.9%, topping all full-year performances since 2010 with its 7th strongest gain since prices in
the private gold market began to float in 1968.
This week's
London Bullion Market Association conference – held this fall in Hollywood, Florida – yesterday closed with attendees predicting on average that gold prices will rise another 10.0% by the time of next October's LBMA event, booked for Kyoto, Japan.
Last year's
LBMA conference gold forecast badly missed the 2024 price surge, predicting it would trade only at $1990 this week – a level beaten by 34.3%.
Now setting 31 new London benchmark highs so far in 2024, the gold price in Dollars has only topped that record twice.
1979 saw gold make 54 new daily highs as that decade's oil-driven inflation peaked with the Soviet invasion of Afghanistan and the Iranian hostage crisis.
2011 then saw 38 new record days for gold prices as the global financial crisis – sparked by the US subprime mortgage debt collapse a half-decade before – was followed by US Treasury bonds losing their triple-A credit rating amid the Eurozone debt crisis.
Euro gold prices this afternoon fixed around €2455, the 4th new all-time record day in a row.
Gold for single currency investors and savers has now made 37 new all-time highs in 2024 so far, beating its 2010 record against the Euro – launched in 1999 – by 7.
The benchmark
UK gold price in Pounds per ounce meantime came in £2053, making its 33rd fresh record-high day of 2024.
That beats 2011's full-year count by 1 and lags only 1978 (38) and 1979 (40).
Government bond prices rose Wednesday, pushing down 10-year US Treasury yields towards 4.00% per annum – 1/10th of a percentage point beneath last weekend's 2.5-month high – even though voting Federal Reserve policymaker Raphael Bostic of the Atlanta Fed
said late Tuesday he wants only one cut of a 1/4 point before the end of 2024, rather than the half-point drop forecast by most Fed members.
Betting in the Fed Funds futures market now matches
the Fed's consensus 'dot plot' forecast that year-end rates will be 4.40% rather than today's level of 4.83%.
Non-voting Fed member Neel Kashkari of the Minneapolis division said Monday that "further modest reductions" look "appropriate" to him.
But voting member and Fed Governor Christopher Waller called for greater caution, because
last month's acceleration in consumer-price inflation was "disappointing [and] not welcome".
New economic data so far this week says that China's imports barely grew in September while export growth sank, but new bank lending blew past analyst forecasts amid Beijing's promise of new economic and monetary stimulus.
Industrial output in Japan meantime continued to sink, down 4.9% per year in August, and while output from the 20-nation Eurozone stabilized that month, wholesale prices in world No.3 economy and No.4 manufacturing country Germany fell more quickly in September.
Consumer prices in Italy and Canada slowed last month, cutting annual inflation to 0.7% and 1.6% respectively.
The British Pound today lost almost 1 cent against the US Dollar after new UK data said inflation has slowed dramatically to 1.7% headline and 3.2% core, which excludes fuel and food.
Both readings are the weakest in 3 years. Betting in interest-rate futures now puts a 91% chance on the Bank of England cutting the cost of borrowing further when it meets next month, up from below 80% before the CPI inflation data came out.
The Euro also declined versus the Dollar, hitting an 11-week low beneath $1.09 ahead of tomorrow's ECB decision.
German think-tank the Institute for Economic Research DIW says the European Central Bank could have capped inflation across the 20-nation Eurozone at 3% instead of the 10% peak hit in 2021-2022's post-pandemic supply-chain shocks by raising interest rates sooner, more steadily, and more often.
LBMA delegates yesterday projected a much stronger 12 months ahead for silver than gold, making a forecast as a group of $45.10 per Troy ounce for the more industrially-useful precious metal between now and next October's conference.
That would represent a gain for silver of 36.7% from last week's new 12-year high, made just 5 cents shy of $33.
Silver today rallied once more but peaked nearly 80 cents beneath that recent high before dropping back to $31.70 as gold prices also fell back, erasing the day's earlier move to new record highs with a retreat to $2670 by the close of London spot trade.
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