Gold price rises significantly at the beginning of the week – Commerzbank

The Gold price rose by up to 3.7% or $150 to $4,150 per troy ounce since yesterday's market opening, Commerzbank's commodity analyst Carsten Fritsch notes.

Gold to reach $4,200 in the coming year

"Silver outperformed Gold, rising by more than 5%. The prices of platinum and palladium also rose significantly. This means that precious metals recorded the strongest price increases among the exchange-traded commodities we monitor. In the case of Gold, this is surprising, as the higher risk appetite due to hopes for a settlement of the US government shutdown, which has been going on for a good 40 days, could actually have caused headwinds."

"This fact was apparently more than offset by recent weaker US economic data, such as US consumer confidence falling to a 3½-year low, as this makes a further interest rate cut by the US Federal Reserve in December more likely. In addition, it is obviously expected that a significant slowdown in the US economy will become apparent once data publication resumes. This, in turn, could lead to more substantial Fed interest rate cuts."

"Our economists anticipate further interest rate cuts in the coming year beyond the extent expected by the markets, which argues in favor of a higher Gold price. We expect Gold to reach $4,200 per troy ounce in the coming year. Silver is then likely to trade at $50 per troy ounce, platinum at $1,700 per troy ounce, and palladium at $1,400 per troy ounce."