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On Wednesday morning, the price of gold was higher than ever before: at 2,480 US dollars per troy ounce, the value was climbing steadily towards the 2,500 dollar mark. “If the current momentum continues, we could expect prices to rise even further before the end of the year,” said Tim Waterer, analyst at KCM Trade.
As “Capital” now reports, there are three main reasons for the latest rally. On the one hand, the assassination attempt on Donald Trump last Saturday is the reason for the chaotic situation on the stock market. Investors are also hoping that the Fed will cut interest rates. Recently, the geopolitical situation has become tense , which always has an impact on the demand for gold.
Overall, this will result in a weaker dollar, say market participants. And a weak dollar strengthens the price of gold, but only for dollar and not for euro investors.
Geopolitics Drives Gold Price To Record Highs
Gold prices hit new record highs, driven by geopolitical tensions and uncertainty.
Owners of Gold can rejoice: The price of gold has been boosted in recent days by the simmering tensions in the Middle East. The precious metal, which is considered a safe haven, has also benefited from the monetary situation this year . But now the plateau may have been reached.
Investors currently have to pay around 2390 US dollars for a troy ounce of gold (around 31.1 grams) . Last week the price briefly climbed above 2400 US dollars – a record high. Just three months ago it was only around 2000 dollars.
There are many reasons for the rise in the price of gold, say market experts. And there is nothing to suggest a collapse in the short term. There are no important economic data from the USA in the coming week, so the precious metal is unlikely to come under pressure for the time being.
Feeling Of Uncertainty Drives Gold Price Rise
One of the most plausible reasons for the price increase is the general feeling of uncertainty. It seems that many large investors have lost confidence in the world currencies and are therefore stocking up on gold.
Fears of war – Israel, Iran and Ukraine – are also contributing to the uncertainty. “But I don’t believe that these conflicts are the main drivers of the gold price,” Carrozzo continued.
An Gold trader expert said: “The tensions in the Middle East are likely to continue to support the price of gold. Gold tends to benefit in times of increased geopolitical risks, as investors are looking for safe investments.”
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