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Why the price of gold keeps climbing to unprecedented heights

gpldceylon | goldprice news | 2024.09.29

Gold hit another all time high this week. Recent gains for the precious metal are largely credited to ongoing economic uncertainty, geopolitical tensions and strong demand from central banks around the world.

If trends continue, analysts have bullish outlooks on the price of gold for the months ahead. But the future is never promised. Here’s what you need to know.

Where does the price of gold stand today?

The New York spot price of gold closed Tuesday at just over $2,657 per Troy ounce — the standard for measuring precious metals, which is equivalent to 31 grams — the highest recorded to date, per FactSet. That would make a gold bar or brick weighing 400 Troy ounces worth more than $1.06 million today.

This week’s record high means that the price of gold has climbed hundreds of dollars per Troy ounce over the last year. Tuesday’s price is up nearly $145 from a month ago and more than $740 from this time in 2023.

The price of gold is up nearly 30% year to date, analysts note — outpacing the benchmark S&P 500’s roughly 20% gain since the start of 2024.

Why is the price of gold going up?

There are a few factors behind the recent gains.

Interest in buying gold often comes at times of uncertainty — with potential concerns around inflation and the strength of the U.S. dollar, for example, causing some to look for alternative places to park their money. Gold also surged in the early days of the COVID-19 pandemic.

Among sources of uncertainty today are geopolitical tensions — which escalated over recent days with Israel’s deadly strikes in Lebanon. And the ongoing wars in Gaza and Ukraine have continued to fuel fears about the future worldwide.

In markets like the U.S., there’s also particular concern about the health of the job market. Last week’s larger-than-usual half-point cut by the Federal Reserve signals a new focus on slowing employment numbers, and more rate cuts are expected before the end of the year. And such action arrives in the midst of a tumultuous election year — which could prove crucial to economic policy in the road ahead, too.
In the near future, people are considering “any case of turbulence in the economy,” FxPro senior market analyst Michel Saliby explained. “This is why they’re keeping a decent portion of gold in their portfolio as a ‘safe haven.’”

Analysts also point to strong demand from central banks around the world. Joe Cavatoni, senior market strategist at the World Gold Council, noted last month that central bank demand was well-above the five year average — reflecting “heightened concern with inflation and economic stability.”

Recent stimulus measures in China aimed at boosting consumer spending are also expected to up retail investments, Saliby added, further boosting gold’s performance.

Source : goldprice.org Published by : Goldceylon

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