Price Of Gold Hits Record High At over $2,000/ounce
Gold hit a record high Monday as growing optimism that the Federal Reserve will cut US interest rates in the new year has dented the dollar in recent weeks.
The precious metal, seen as a haven investment, reached an all-time pinnacle at $2,135.39 an ounce.
Profit-taking later set in, leaving it to trade at $2,069.01. The dollar was also firmer Monday.
Gold is benefitting also from the Israel-Hamas war according to analyses.
“Concerns about the shaky global economic backdrop and the Israel-Hamas conflict have fuelled investor demand for safe-haven assets like gold,” said Victoria Scholar, head of investment at Interactive Investor.
“Plus, expectations for Fed rate cuts next year have put downward pressure on the US dollar which is trading around three-month lows, adding to gold’s attractiveness.”
Elsewhere, bitcoin traded above $40,000 for the first time since May last year, boosted by hopes that the United States would soon allow broader trading of the world’s biggest cryptocurrency.
Major stock markets mostly fell in Europe and Asia, while oil prices dropped.
Traders are shrugging off Fed boss Jerome Powell’s attempts to temper expectations of US rate cuts in the first quarter of 2024.
Bets on an easing of monetary policy were ramped up when Powell said Friday that it was “well into restrictive territory” after more than a year of hikes that have put borrowing costs at a two-decade high.
Central banks around the globe have sent interest rates soaring, helping to bring down surging inflation.
Bloomberg reported that traders saw a 60 percent chance of a US rate cut, while they have fully priced in one in May.
“Markets are piling in on the rate cut bets,” said Kyle Rodda at Capital.com.
He added that recession risks added to gold’s appeal.
