Gold price reaches new record high
Gold is as expensive as it has ever been before - and it could still increase in price. Behind this rally lies the expectation that the US Federal Reserve will lower interest rates soon. Currency watchers from various countries are significantly involved in the enormous increase in gold prices over the past months.
The gold price has reached a new all-time high. The price for an ounce of fine gold reaches the top at 0.6% or $2,482.29. This is the highest value ever - but according to experts, not the end of the current gold rally. "The price range of $2,500 is the next immediate goal, but if the current dynamics continue, we could still be calculating prices that go even further up by the end of the year," said Tim Waterer, analyst at KCM Trade.
Directly driven by the hope for lower interest rates in the US and Europe, the attraction of interest-free precious metals increases when interest rates fall. US Federal Reserve Chairman Jerome Powell said on Monday evening that the latest inflation data had shaken the confidence of political decision-makers that the price pressure would sustainably decline.
Interpreted by stock market participants as a signal, the first interest rate cut in the US might not be long in coming. Constantin Oldenburger, analyst at broker CMC Markets, warned: "It's one thing to say that the data justifies a rate cut. It's another to agree within the Federal Reserve that it should be done."
Further fueled by speculation, central banks worldwide have been buying gold extensively for some time. According to industry association data from the World Gold Council, central banks bought nearly 1040 tons of gold on the market last year.
"Central bank purchases remain an important price driver, which has significantly increased since the outbreak of the war between Russia and Ukraine and the freezing of Russian assets in the West," it was stated in an analysis by Dekabank in the spring.
Central Banks have been significantly increasing their gold purchases, driven by various factors including geopolitical tensions. The US Federal Reserve, in response to the latest inflation data, has shown signs of potentially lowering interest rates. This shift in monetary policy could further boost the appeal of interest-free assets like gold. If interest decisions align with these expectations, the gold price could surpass $2,500 per ounce by the end of the year, as predicted by Tim Waterer, analyst at KCM Trade.
