Gold hits week high despite Q3 decline

Gold’s benchmark futures contract on New York’s Comex, December, settled Friday’s trade up $3.40, or 0.2 percent, at $1,672 per ounce.

The spot price of bullion, which is more closely followed than futures by some traders, was up just $1.25, or 0.1 percent, at $1,661.86 a tonne.

Despite the recent rebound, the precious metal closed the month 3 percent lower, and plunged 7.5 percent in the third quarter of the year, its worst quarter since March 2021.

Gold’s four-day rebound reached a climax at the last trading day of the week when the spot price hit a one-week high of $1,675.35 after data showing another surprisingly higher U.S. inflation print for August that reinforced expectations for more super-sized Federal Reserve rate hikes.

With gold being considered as a store of value and a hedge against inflation and Fed rate increases, some analysts are optimistic the metal would get firmer in the short-medium term.

“Inflation expectations matter and things are starting to look better for gold,” said Ed Moya, analyst at online trading platform OANDA.

Though Moya expressed optimism about gold going up into October, some analysts were less impressed with bullion’s outlook.

In his assessment of gold’s recent surge, Craig Erlam, senior market analyst at OANDA, noted that while the recovery has been encouraging, it’s hard to imagine building on it in any significant way as that would probably require rate expectations and inflation to have peaked.

“While that may be the case, it’s hard to imagine pressure easing from here which may maintain pressure on the yellow metal for a little longer yet,” Erlam added.

Robert Cyran, analyst at Reuters, said gold has been an inferior hedge and the opportunity costs have been high despite the

According to Cyran, an investment  in gold 10 years ago would have tripled compared to the “see-saw” movement seen in previous weeks.