Weak U.S. Data Boosts Gold Past $4,300; ETFs Hit New Highs

Gold prices have climbed above $4,300 per ounce, fueled by a significant drop in U.S. non-farm payroll figures for July, which fell far below expectations. This economic data has intensified market anticipation of interest rate cuts, providing a major boost to gold's appeal as an investment.

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Gold prices have strong support at $4,000 per ounce. With the easing of the war, cooling expectations of interest rate hikes, and a weakening dollar, precious metals are rising against the trend.

The surge in gold prices has coincided with a rally in the stock values of gold exchange-traded funds (ETFs) on the Taiwan Stock Exchange. Funds like Yuanta S&P Gold ETF (00635U) and Yuanta S&P Gold 2X Leveraged ETF (00708L) have seen increased trading volume and reached new highs in recent performance.

Analysts point to a combination of factors supporting gold's upward trend. These include easing inflation, diminishing expectations of further interest rate hikes, and a weakening U.S. dollar. A survey by the World Gold Council indicates that approximately 45% of central banks plan to increase their gold reserves in the coming year, with the Bank of Korea recently resuming gold purchases after more than 13 years. Despite some previous price target reductions by foreign investment banks, UBS has revised its outlook, predicting gold prices could exceed $5,000 per ounce by mid-2025 and reach $5,200 by June 2025, citing macroeconomic conditions and diversification needs.

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Gold still has upward potential due to the macroeconomic environment, capital flows, and the need for portfolio diversification.

Given the current volatility in the stock market, financial experts recommend that conservative investors consider accumulating gold around the $4,000 per ounce level. This strategy could effectively mitigate investment risk.

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Conservative investors can take advantage of the low prices around $4,000 per ounce to reduce investment risk.