Look at that shiny thing over there… Gold has reached an all-time high! Today, it’s trading over $4,400 an ounce for the first time ever. This huge jump comes on the heels of a 68% increase in gold prices this year. Prices opened at $2,600 an ounce. On Monday, the gold spot price shot up to $4,420. Yet, subsequently, it took a minor tumble as the mood of investors shifted and in response to macroeconomic factors.
Market analysts are unsure what has caused the phenomenal increase in gold prices. One major factor behind that has been unshakeable expectations that the US central bank will continue to cut interest rates in the year ahead. The uncertainty on the economic front is increasing, fuelled by geopolitical tensions and ongoing trade wars. Consequently, investors are running towards gold, seeing it as a protective asset.
Adrian Ash, the director of research at BullionVault, said that the recent market dynamics surrounding gold are “a new era. He stated that gold has experienced “slow-burning trends around interest rates, around war and trade tensions,” which have significantly influenced investor behavior this year.
Gold’s price surges are the biggest seen since 1979—the largest annual increase in gold in over 40 years. Lingering trade disputes and increasing attacks on the US Federal Reserve have added to a climate of investor trepidation. In response, millions are flocking to gold’s safe-haven qualities.
This year’s performance is indicative of this evolving landscape. Regular investment options may not provide the same security as precious metals do today. Analysts have noted that geopolitical hot spots and key macroeconomic policy choices are swaying investors. More recently, escalating trade tensions are pushing them further in the direction of gold.
“Gold has gone crazy this year,” – Adrian Ash, director of research at BullionVault.
Our country is already grappling with complex problems such as rampant economic inequality and rising international tensions. Consequently, jittery investors will continue to seek refuge in gold for safety during these volatile times.