Gold Prices Hit New Record High
Gold prices surged to a new record high of $2,100 on Monday, marking the second consecutive day of reaching a new peak. The global demand for bullion appears to be on the rise, with analysts predicting that gold prices are poised to continue increasing into the next year, possibly remaining above $2,000 levels.
The recent surge in prices can be attributed to the Israel-Palestinian conflict, which has increased demand for gold as a safe-haven asset. Additionally, expectations of potential interest rate cuts have further supported the rise in gold prices.
Market experts are bullish about the future outlook for gold, with UOB’s Head of Markets Strategy, Global Economics and Markets Research estimating that prices could reach up to $2,200 by the end of 2024. Another analyst, Nicky Shiels, head of metals strategy at precious metals firm MKS PAMP, also expressed optimism about gold prices, predicting a possible rise to $2,200 per ounce.
The surge in gold prices has been driven by a combination of factors such as weaker U.S. dollar, geopolitical uncertainty, and potential interest rate cuts. Bart Melek, head of commodity strategies at TD Securities, highlighted that central bank purchases and the increasing pessimism about the U.S. dollar as a reserve asset are acting as key catalysts in boosting gold prices.
According to a recent survey by the World Gold Council, 24% of all central banks intend to increase their gold reserves in the next 12 months, indicating a potential rise in demand from the official sector in the coming years.
As the Fed’s Chairman Jerome Powell pushed back on expectations for aggressive interest rate cuts, analysts believe that the main factors buoying gold in 2024 will be interest rate cuts by the U.S. Fed, a weaker U.S. dollar, and high levels of geopolitical tension according to BMI, a Fitch Solutions research unit.
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