As the market heats up its expectation for Fed interest rate cuts and some traders bet heavily on Trump's re-election, the overall trend of rising gold prices continues. The price of gold has once approached $2,490 today and then fallen back, showing a volatile trend. At present, the market has fully priced in that the Fed will cut interest rates in September, while the call for interest rate cuts in July has begun to heat up. Some institutions believe that the future gold price may reach $3,000 per ounce.$Gold Futures(AUG4) (GCmain.US)$The price once approached $2,490 today and then fell back, showing a volatile trend.

At present, the market has fully priced in the Fed's interest rate cuts in September, while the call for interest rate cuts in July has begun to heat up. Some institutions believe that the future gold price may reach $3,000 per ounce.

The market has priced in Fed's interest rate cut in September 100%, and the call for the interest rate cut in July is increasing.

At present, the market has fully priced in the Fed's interest rate cuts in September, according to CME's "Fed Watch." The probability of the Fed keeping the interest rate unchanged until September is 0.0%, the probability of a cumulative 25 basis point cut is 90.4%, the probability of a cumulative 50 basis point cut is 9.4%, and the probability of a cumulative 75 basis point cut is 0.2%.

Based on this, more and more Wall Street economists are warning that the Fed has waited too long to overturn its policy after raising benchmark interest rates to the highest level in 20 years. Mild inflation data released in the past three months and slowing economic growth and rising unemployment rates are leading to a call for the Fed to cut interest rates at the policy meeting to be held in two weeks.

Jan Hatzius believes that the Fed has solid reasons to cut interest rates at its July meeting at the earliest. He pointed out that the latest unemployment and inflation data indicate that the Fed's monetary policy rule requires the federal funds rate to be 4%, while the current target range is 5.25%-5.5%, leading to an expectation of an adjustment cut soon. He added that the reasons for taking action in July include: if there is a temporary rebound, the volatility of monthly inflation may make it difficult to explain the interest rate cut in September; and the "undeniable (if never acknowledged) motivation" to avoid starting interest rate cuts in the last two months of the presidential election. He said, "This doesn't mean the committee can't cut interest rates in September, but it does mean that July would be more preferred." He added, "If the reason for a rate cut is clear, why wait another seven weeks to put it into practice?"

Mohamed El-Erian pointed out at the end of June that the favored inflation indicator of the Fed was weak, highlighting the risk that economic slowdown is magnifying central bank policy errors. "The speed of the economic slowdown is greater than that of most economists' expectations, and greater than that of the Fed's expectations. The economy is slowing down, and there is almost no buffer." "A forward-looking Fed will definitely keep its options open for a rate cut in July. On the contrary, the current Fed is still overly dependent on data and needs a lot of historical data to change it."

Neil Dutta believes that the prospect of the Fed cutting interest rates three times this year has begun to come into view. Neil Dutta said, "it's all about risk management." He said that the unemployment rate is slowly rising, perhaps by about 0.1 percentage point per month in the past three months; inflation is falling, and may continue to fall, but bankruptcies are increasing, both for companies and individuals. He added that the Fed has no reason to wait until everything is certain before taking action. Inflation is sliding, and the stock market's gains are increasingly driven by the gains of a few stocks. So, "why not solve the problem in advance?"

Drew Matus also said:"Waiting too long may result in a peak in unemployment, but there is little extra return on the inflation side."

Wall Street calls for gold prices to reach $3,000

Bank of America analysts predicted in June that gold prices could soar and reach $3,000 per ounce in the next 12 to 18 months.

Bank of America explains that reaching $3,000 depends on the increase in non-commercial demand. They believe that Fed rate cuts may trigger this situation, leading to inflows into physical gold-backed ETFs and increased trading volume. In addition, central bank purchases are another key factor. Bank of America said:"It is also important for central banks to continue buying gold, and efforts to reduce the proportion of dollars in foreign exchange portfolios may encourage more central banks to buy gold."

Citigroup analysts, including Maximilian J Layton, expect the central bank's gold purchases to support gold prices for the next 25 years, slowing down at $2,700-3,000.

The proportion of investment demand in gold mining supply is the main driving factor for gold pricing. In the past two years, investment demand from central banks has continued to rise, accounting for the majority of mining supply, pushing gold prices higher. It is expected that the central bank's gold purchases will support gold prices for the next 25 years, slowing down at $2,700-3,000. Citigroup pointed out that the next round of investment demand and price increases will come from normalizing US interest rates (Citigroup's US economic team believes that the Fed will cut interest rates for eight consecutive months starting in September), especially pushing up ETF demand. Supported by factors such as de-dollarization, the central bank's gold buying spree is expected to continue.

How to Invest in Gold through ETFs?

Because the stock prices of gold stocks are not completely synchronous with gold prices due to factors such as company performance, if you invest because of your bullish view on gold prices, besides gold stocks, gold ETFs are also a good choice. Here are some gold ETFs to choose from:

1,$SPDR Gold ETF (GLD.US)$: This is the largest gold ETF in the world, providing investors with the opportunity to track spot gold prices.

2,$Gold Trust Ishares (IAU.US)$: This is also a large gold ETF that tracks the market value of gold.

3,$VanEck Gold Miners Equity ETF (GDX.US)$: This ETF invests in a range of global gold mining companies, rather than directly in gold.

The top three component stocks of this ETF are$Newmont (NEM.US)$,$Agnico Eagle Mines Ltd (AEM.CA)$And.$Barrick Gold Corp (ABX.CA)$As of July 16th, the annual gains of three stocks in the US stock market were 18.37%, 45.96%, and 11.36% respectively.

In addition, there are other gold ETFs available for investors to choose from in the market. Mooers can click on Market>ETF>Theme ETF>Gold ETF to view~

Editor/Jeffy