Gold Reports

Gold appears poised for further gains after latest record high

Gold prices appear set to touch new record highs after an all-time peak of $2,572.81 per ounce touched on September 13.

The latest record high was driven by a second quarter-point rate cut this year by the European Central Bank (ECB) on September 12, and was underpinned by geopolitical uncertainty against a backdrop of the wars in Ukraine and the Middle East.

A very close U.S. presidential election campaign, combined with fears over the outlook for the conflicts in Ukraine and the Middle East, have underpinned gold’s appeal as a “safe haven” asset.

Reports of robust central bank buying and net inflows into physically backed gold exchange traded funds, have also contributed to the rise of the gold price, which is up 24 percent so far this year, analysts say.

Expectations of an interest rate cut by the U.S. Federal Reserve (central bank) later in September – potentially the first U.S. rate cut since 2020 – as well as of future rate cuts by other central banks around the world, as inflation eases, augur for a further strengthening of the gold price, with some analysts predicting bullion could reach USD $2,600 per ounce by the end of 2024.

Analysts are divided over whether the next U.S. rate cut would be 25 or 50 basis points. A larger than expected rate cut could potentially drive up gold prices, as bullion bears no yield. A 25-basis points rate cut is widely priced into the gold market.

Fears of a U.S. economic slowdown could lead to further U.S. rate cuts towards the end of this year, and help push up gold prices, analysts say.

Financial services group Macquarie has raised its gold price forecasts, and now foresees an average cyclical peak in the first quarter 2025 of USD $2,600 per ounce, with potential to rise towards USD $3,000 per ounce.

The British pound edged up against the U.S. dollar on September 13, with a focus on upcoming UK inflation data, and a Bank of England meeting later in the month.

Most analysts do not expect a further cut in UK rates this month after the Bank of England cut the base rate by 25 basis points to 5.00 percent in August.

On September 11, official data showed the UK economy stagnated in July, sending the pound to a three-week low against the dollar.

Any further signals of a softening UK economy, could weigh on the pound, making dollar-denominated gold more expensive for UK-based savers.

Gold Reports

Gold was among the very first metals to be mined because it commonly occurs in its native form. It is pure, beautiful and lasts for a lifetime since it doesn’t age and hence the metal started to gain value. Because of its exquisite properties, chemical and physical, people started crafting expensive objects made in gold that were worn, cherished and passed through generations. Some on the other hand took gold as something they could invest in as they saw its value appreciating while people started treating it as a precious and valuable find. Not just that, artisans of ancient civilizations lavishly used gold to craft sculptures, lifestyle objects and also to decorate tombs and temples. Even today, archaeologists keep uncovering such finds, some even dating back to more than 5,000 years ago.

Gold, even today remains one of the most precious elements that is found on earth. Its value keeps fluctuating with respect to various geographical, political and economical factors. Geographical factors include the availability of gold mines in a geographical area, whereas political factors like wars and international tensions have a drastic effect on the other hand economical factors like demand and supply also play a major role in determining the rate of gold.