Gold Prices Reach New Record High

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Gold prices reached new record highs on Monday, hitting $2,630 an ounce. The precious metal has gained more than 27% since the start of 2024. This puts it on track for its best annual performance in 14 years.

While record high prices may dissuade some investors, several factors suggest that the rally still has room to run. The Federal Reserve’s decisive 50-basis-point cut last week added to enthusiasm for gold. This lowered the opportunity cost of holding the non-yielding asset.

This is just the start of the Fed’s easing cycle. An additional 50 basis points of further easing is expected in the remainder of 2024. This will be followed by 100 basis points more in 2025.

As returns on cash are eroded by this lower interest rate environment, more investor funds may be redirected into assets like gold. Conflicts in both the Middle East and Ukraine-Russia remain unresolved. This bolsters the case for gold as a geopolitical hedge.

Gold’s rising appeal

Israel carried out new strikes on southern Lebanon, following exchanges of fire between the Israeli Defense Force and Hezbollah. Meanwhile, the Ukraine-Russia conflict continues to escalate, with Ukraine striking two Russian munition depots recently.

Central bank buying has significantly contributed to the rise in gold prices over recent years. It now accounts for roughly a quarter of total gold demand, double its level before 2022. With Fed rate cuts materializing, investor demand via exchange-traded funds (ETFs) is also expected to increase.

According to official data from the World Gold Council, inflows into gold ETFs continued in August for a fourth consecutive month. Total holdings have rebounded to nearly 3,182 metric tons, the highest since the start of the year. Despite the rally, gold’s hedging properties remain attractive.

Investors may consider exposure through structured strategies, ETFs, or gold miner equities. Those unaccustomed to the volatility of individual commodities might consider an actively managed strategy that seeks to deliver alpha over comparable passive indices. In summary, analysts remain optimistic about gold in the global strategy.

Many are setting a target of $2,700/oz by mid-2025.


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  • BullionVault.”No Title”.
  • UBS.”Daily: Record gold prices can still shine brighter”.
  • Yahoo.”Gold hovers near record highs. Here’s where analysts say it’s headed next.”.

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