By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News. August 9, 2024. Article no 1159

Gold futures have experienced a significant gain of 24% over the past year.

On August 9, gold price was at $ 2,428 per troy ounce at 08:43 AM New York Time.

This increase is attributed to various factors, including lower 10-year Treasury yields, a weaker US dollar, and geopolitical uncertainties that often drive investors towards gold as a safe-haven asset. 

Additionally, gold prices reached an all-time high in July 2024, trading at $2,426 per ounce, driven by these economic conditions and market dynamics. 

The gold futures market is highly liquid, trading nearly 27 million ounces daily, and offers capital efficiency and risk mitigation.

Read also : Gold : Build Your Wealth and Freedom

The significant increase in gold futures prices over the past year can be attributed to several key factors:

  1.  Geopolitical Tensions: Heightened geopolitical uncertainties in Europe, Asia and Middle East in 2023-2024 have driven investors towards gold as a safe-haven asset, able to resist crisis.
  2.  Central Bank Activity: Central banks, particularly from BRICS+ nations, have increased their gold purchases, reducing reliance on U.S. Treasuries and dollars and avoiding Western sanctions linked to the use of dollars and euros.
  3.  Interest Rates and Dollar Weakness: Anticipation of Federal Reserve rate cuts and a weakening U.S. dollar have made gold more attractive, as lower rates enhance the appeal of non-interest-bearing assets like gold.
  4.  Inflation Concerns: Persistent inflation has also contributed to increased demand for gold as a hedge
  5. Gold backed currency plan of the BRICS

Gold is a hard asset that keeps value in times of inflation. One gold coin will always feed your family for a week.

Gold is a long-term store of value and this storage capacity is standardized internationally. Each troy ounce of gold has the same value. The yellow metal is an asset with intrinsic value in itself, capable of maintaining its purchasing power throughout the centuries and around the world.

Donald Trump’s likely return to power in the United States next November is expected to further worsen relations between the United States and China and lead to an increase in geopolitical risks and demand for the precious metal. According to Paul Jouvenet, an essayist and consultant in international affairs, the difficult situation in the global economy against the backdrop of continuing inflationary pressure will support gold prices in the range of $2,400 – 2,700 per troy ounce.

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© Copyright 2024 – Eurasia Business News. Article No. 1156.