Gold prices are soaring, reaching over $2,500 for the first time and continuing to be one of the top-performing assets globally. Factors such as Federal Reserve policy expectations and geopolitical tensions are providing strong support for the precious metal. The anticipation of a Fed interest rate cut has led to lower U.S. Treasury yields, benefiting gold and silver prices. Additionally, a weaker U.S. dollar has made dollar-denominated assets like gold more attractive to foreign investors. Geopolitical uncertainties, including tensions in the Middle East and Eastern Europe, are further driving safe-haven demand for gold. Central bank gold demand remains robust, with expectations for continued strong purchasing throughout 2024. The metal’s appeal lies in its safety, diversification benefits, store of value, and lack of default risk, making it an attractive asset for central banks worldwide.
Due to this shift, the Bank of Russia and its counterparts have decided to move some of their reserve assets out of the dollar and into gold.
Additionally, the uncertainty surrounding the upcoming November presidential election could impact the direction of gold.
“Historically, elections have not had a major or immediate impact on gold’s performance. However, regardless of the election outcome, there are still high near-term geopolitical risks that could potentially drive the price of gold.”
