On Wednesday, gold prices exceeded historic gold prices, trading over $4,400 an ounce for the first time in history. Collectively, these bills are a historic gain of more than 68% since the beginning of the year. It’s the biggest increase we’ve observed since 1979! And at the beginning of this year gold priced at $2,600 an ounce.
In recent months, gold prices have climbed. Two-thirds of this jump is due to the view that the U.S. central bank will cut rates further next year. On Monday, the spot price of gold reached an all-time high of $4,420, before pulling back a bit. Analysts including IHS Markit point to a few reasons driving this upward trend. One big factor is the weaker U.S. dollar, which makes gold less expensive for foreign buyers.
Geopolitical tensions including the war in Ukraine and extreme trade policies have further stimulated demand for gold as a safe haven asset. Today more than ever, investors are seeking stability during periods of uncertainty, especially considering the current geo-political landscape. Adrian Ash, a prominent market analyst, noted the existence of “slow-burning trends around interest rates, around war and trade tensions,” which have contributed to the rising gold prices.
The role of U.S. politics in all of this is huge. Ongoing trade disputes and criticisms directed at the Federal Reserve by former President Donald Trump have further complicated the economic landscape.
“You’ve got the trade war, the attacks on the US Federal Reserve and you’ve got geopolitical tensions, all of those provocations come from Trump,” – a market analyst stated.
All of these factors have produced intense demand for gold. As a result, investors are looking for security as they try to insulate themselves from the risk of commercial insolvency. At times like these, month by month, the charm of gold seems to increase, thanks to the economic forecasts and happenings across the world.