A photograph taken on April 30, 2024 shows gold bracelets displayed in a shop window on Green Street, east London. In mid-April 2024, the price of the precious metal peaked at its historic record, more than 2,400 dollars (around 2,250 euros) per ounce, or around thirty grams. But more than the price increase itself, the worst thing for jewelers remains the volatility, namely the big differences from one day to the next which tend to scare away customers, who prefer to wait for a return to normal. JAMES RYBACKI/AFP via Getty Images
As of Monday, August 19, gold prices have reached new highs. Per CNBC, spot gold is holding steady at a record $2,508.14 per ounce and US gold futures advancing to $2,540.8 per ounce, an extended gain compared to previous sessions.
With this new record, gold prices are set to climb higher. In fact, analysts predict that a potential peak of $3,000 per ounce by the middle of 2025 is highly possible, according to Fortune.
The surge in gold prices comes amid the looming decision of the US Federal Reserve on interest rates. Rising prices can be attributed to the traditional role that gold usually holds in times of uncertainty, considering that the US economy is still not holding up well.
A rate cut by the Federal Reserve is widely expected and is pushing the gold prices higher. Investors are betting that the cut in rates, possibly as early as next month, will make investment gold more attractive against interest-bearing assets. Analysts say that a Fed rate cut driving good momentum in equities could see gold hit $2,700 in the near term.
This week in Jackson Hole, in the annual economic policy meeting, Fed Chairman Jerome Powell is expected to speak about what will likely provide more insight into the path taken by the Fed and its effects on the price of gold.
Sabrin Chowdhury of BMI, head of commodities analysis noted that gold thrives amid uncertainty, which is currently heightened by geopolitical tensions and economic instability
FX Street shared that geopolitical events, including ongoing conflicts in Ukraine and potential escalation between Israel and Iran, are contributing to the heightened demand for gold. This is after the recent assassination of Hamas political leader Ismail Haniyeh has intensified tensions in the Middle East, with Israel on high alert and the US increasing its military presence in the region.
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