By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News. August 23, 2024. Article no 1185.
Gold’s run above $2,500 marks its fifth push to record highs so far this year, and while gold prices are elevated, analysts have said that it does not appear overbought.
December gold futures last traded at $2,547 an ounce, roughly unchanged from last week, reflecting strong demand amid global geopolitical tensions and economic uncertainty.
On August 9, gold price was at $ 2,428 per troy ounce at 08:43 AM New York Time. Now, on August 23, gold price is at $ 2,511 per troy ounce at 04:43 PM NY TIME. It is a + $25.7 gain over the day.
Along with a potential 50-basis-point rate cut in September by the U.S. Federal Reserve, markets see rates falling more than 100 basis points by the end of the year.
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:
- 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.
- 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.
- 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.
- Inflation Concerns: Persistent inflation has also contributed to increased demand for gold as a hedge
- 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 by December 2024.
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© Copyright 2024 – Eurasia Business News. Article No. 1185.
Eurasia Business News 