GLD - Gold scores best month since March on hopes rate-hike cycle nearly done

2023-07-31 19:25:15 ET

Gold futures closed Monday at the highest level since May and tallied their best month since March, boosted by a weaker U.S. dollar and hopes the cycle of central bank interest rate hikes is near an end.

Front-month Comex gold ( XAUUSD:CUR ) for August delivery ended Monday +0.5% and rallied 2.6% for the month of July to $1,970.50/oz, snapping a two-month losing streak.

ETFs: ( NYSEARCA: GLD ), ( GDX ), ( GDXJ ), ( IAU ), ( NUGT ), ( PHYS ), ( GLDM ), ( AAAU ), ( SGOL ), ( BAR ), ( OUNZ )

Recent data showing signs of cooling inflation in the U.S. has raised hopes the Federal Reserve was closer to ending its rate hiking cycle.

This week, Australia will announce its next interest rate decision on August 1, and policy makers are expected to raise rates by 25 bps to 4.35%, the highest in more than a decade, though some market participants expect the RBA will hold its cash rate at 4.1% for a second straight meeting after Q2 inflation cooled by more than expected.

Meanwhile, the Bank of England seems likely to raise rates by 25 bps to 5.25% on Thursday, following the surprise 50-bps increase in June.

"Gold prices are attempting a bullish breakout as optimism grows that the major central banks are all approaching the end of their tightening cycles," wrote Oanda's Edward Moya, noting that the Reserve Bank of Australia "might be one-and-done" this week and the Bank of England "might be done after a couple more."

Two European Central Bank policymakers on Friday also raised the prospect of an end to its rate hikes.

Meanwhile, the dollar index posted its second straight monthly decline, making gold more attractive for other currency holders.

More analysis on gold:

• Gold Still Looks Pricey Based On A 'Fair Value' Model
• $4,000 Gold Is Still Possible After The Fed Starts Easing
• BRICS Gold Standard Is A Big Opportunity

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