Gold Prices Surge to Record High on Expectations of Fed Rate Cuts – Eurasia Business News, July 16, 2024
Gold prices surged to a new record high today, reaching $2,470.90 per troy ounce, driven by several key factors. The primary driver of this price surge was growing expectations of interest rate cuts by the U.S. Federal Reserve. Traders are now anticipating three quarter-point rate cuts this year, with the first cut expected in September. Softer inflation figures in June and dovish remarks from Federal Reserve Chair Jerome Powell contributed to the increased likelihood of rate cuts, rekindling interest in gold as an investment.
The weakening U.S. dollar also played a role in boosting gold demand, as the dollar hit a five-week low, making gold more attractive to investors. Central bank purchases of gold are at their highest levels since the late 1960s, driven by global geopolitical tensions and a reevaluation of holding assets denominated in USD and EUR.
In 2023, central banks added 1,037 tonnes of gold – the second highest annual purchase in history – following a record high of 1,082 tonnes in 2022. The gold rally follows a strong advance in the first half of 2024, with Goldman Sachs expressing optimism about the precious metal’s prospects.
This record-breaking performance of gold reflects its continued appeal as a safe-haven asset and hedge against economic uncertainty, particularly in light of anticipated changes in monetary policy. Subscribe to our Telegram channel for more updates on this developing story.
