The precious metal has rallied ahead of an expected interest rate cut by the US Federal Reserve
The price of gold reached an all-time high on Friday, soaring above $2,600 per ounce as global investors continue to seek safe-haven assets.
Spot gold prices rose 1.13% to a record high of $2,609.8 per ounce before pairing some gains. Prices were up roughly 4% for the week and 23% so far this year, exceeding the 13% advance registered for all of 2023.
Gold has rallied after reports last week that the US Federal Reserve might be ready to lower rates by 50 basis points next week from the current 5.25% to 5.50%, the highest level since 2001. Lower borrowing costs increase the appeal of non-yielding gold.
Analysts attribute the rally to investor demand for safe-haven assets amid global uncertainty and rising geopolitical tensions in the Middle East and Eastern Europe.
Investors traditionally turn to gold in times of market uncertainty to hedge risks and as a store of value. For thousands of years, bullion has been seen as a safe haven during periods of economic instability, stock market crises, military conflicts, and pandemics.
The price of gold has also been buoyed by the dollar’s weakness. The greenback has fallen to the lowest level this year against a basket of peer currencies ahead of the anticipated interest rate cuts by the Federal Reserve.
Bank of America predicted earlier this month that gold prices could go up to $3,000 per ounce within the next 12-18 months.
Other precious metals were also on the rise on Friday, with platinum gaining 2.36% to above $1000 per ounce. Silver went up 3.3% to above $31.
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