Earlier this year, gold price already soared to $2,540.8 per ounce, which was a record high at the time. Now, a new ceiling has been reached.
To be fair, experts were already expecting the gold price to go as high as $3,000, but the timeline is not expected sooner.
In a report by CNBC, at a record high of $2,729 per ounce, experts believe the current status of gold value is at its bullish phase. This surge is being driven by factors such as central banks buying more gold, rising US debt levels, and a potential US dollar's value decline.
Market strategists explained that increasing US debt has historically pushed gold prices up as people seek safer investments due to concerns about debt sustainability and currency devaluation.
US Debt Pushes Gold Price Up
The same report mentioned that US debt is expected to grow from 98% of GDP in 2023 to 181% by 2053, which means the government will print more money to manage deficits but will devalue the currency eventually. This makes gold a more appealing store of value.
In the first half of 2024 alone, central banks already increased their gold purchases to 483 tonnes, which is 5% higher than last year. Within the next three months, regardless of how many central banks will buy, gold prices can possibly cross $2,800. Some even predict that it could reach $3,000 right away.
Similar to the risks of oil prices going up, another main concern is the increasing tension in the Middle East. Companies investing in these countries will turn to safe assets like gold. In China, while retail demand decreased, gold sales remained strong among business industries.
Current predictions from Citi and other market experts put gold price at $3,000 within six to nine months, if oil price surges, according to Reuters.
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