{"id":52573,"date":"2023-12-04T18:09:50","date_gmt":"2023-12-04T18:09:50","guid":{"rendered":"https:\/\/prosfunds.com\/business\/gold-has-never-been-this-expensive\/"},"modified":"2023-12-04T18:09:51","modified_gmt":"2023-12-04T18:09:51","slug":"gold-has-never-been-this-expensive","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=52573","title":{"rendered":"Gold has never been this expensive"},"content":{"rendered":"
\n

\n Gold prices hit <\/s>an all-time high Monday, buoyed by growing expectations of interest rate cuts among investors, a weaker dollar and geopolitical tensions.\n <\/p>\n

\n Prices for the yellow metal jumped as much as 3% in Monday trade to reach $2,135 per ounce, rising above the previous record of $2,072 notched in August 2020. Prices later fell on the day to trade at $2,023 by 11.57 a.m. ET.\n <\/p>\n

\n In recent weeks, investors have grown increasingly confident that the US Federal Reserve has successfully reined in inflation through aggressive interest rate hikes, and may start to cut borrowing costs as early as March next year.\n <\/p>\n

\n Higher interest rates push up the yields on assets such as US Treasuries, drawing in investors.\n <\/p>\n

\n But, when interest rates are low, falling or \u2014 as in this case \u2014 expected to fall, demand for Treasuries ebbs, and gold, which doesn\u2019t pay out any interest, becomes relatively more attractive.\n <\/p>\n

\n The yield on the benchmark 10-year US Treasury bill has fallen from a 16-year high of 5% reached in mid-October to stand at 4.3% Monday.\n <\/p>\n

\n \u201cThe expectations of the end of the tightening cycle have been priced in, pushing longer-term yields lower,\u201d Daria Efanova, head of research at trading platform Sucden Financial, wrote in a note Monday. \u201cThis has created a more favorable environment for gold as a non-yielding asset.\u201d\n <\/p>\n

\n John Reade, a market strategist at the World Gold Council, an association of gold producers, told CNN that, with investors predicting several rate cuts over the next year, gold prices could \u201cquite possibly\u201d shoot above Monday\u2019s record high.\n <\/p>\n

\n Those rate predictions have also weighed on the US dollar, again making gold more appealing. Higher interest rates tend to boost the value of a currency by attracting more capital from abroad into the country, and the reverse is true when rates fall.\n <\/p>\n

\n The dollar slumped 3% last month against a basket of six major currencies. Since gold is priced in US dollars, the fall in the greenback\u2019s value has made it less expensive for investors outside the United States to buy the metal, which should have boosted demand and, in turn, lifted gold prices.\n <\/p>\n

\n Over a longer timeframe, gold has benefited from another factor: A deep sense of global unease. JPMorgan CEO Jamie Dimon has said this may be the most dangerous time the world has seen in decades.\n <\/p>\n

\n Investors typically see the metal as a safe haven since it is a tangible, scarce asset that, in theory, holds its value. Gold prices have risen 10% so far this year.\n <\/p>\n

\n \u201cThe geopolitical risk environment appears to have changed,\u201d Reade said. \u201cNot just (because of) Russia invading Ukraine, not just the terrible things going on in Israel and Gaza, but trade tensions between the US and China, concerns about what will happen in the South China Sea, concerns about what China will do in Taiwan.\u201d\n <\/p>\n

\n A more fractured, febrile world has encouraged central banks\u00a0in emerging markets to stock up on the precious metal, Reade noted. In addition, policymakers in those countries, spooked by the freezing of the Russian central bank\u2019s foreign exchange reserves in the West, have piled into gold as an alternative store of value that they perceive to be safer, he added.\n <\/p>\n

\n According to the World Gold Council, central banks in emerging markets bought 473 metric tons (521 tons) of gold a year on average between 2010 and 2021. But last year, they bought 1,100 metric tons of the metal and, in the first three quarters of this year, 800. That breakneck pace of purchases \u201ccould continue for years, if not decades,\u201d Reade said.\n <\/p>\n

\n Close to a quarter of all central banks said in a survey published in May that they planned to increase their gold reserves in the next 12 months.\n <\/p>\n

\n \u201cConcerns about the shaky global economic backdrop and the Israel-Hamas conflict have fueled investor demand for safe-haven assets like gold,\u201d Victoria Scholar, head of investment at Interactive Investor, said in a note. \u201cPlus, expectations for Fed rate cuts next year have put downward pressure on the US dollar\u2026 adding to gold\u2019s attractiveness.\u201d\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Gold prices hit an all-time high Monday, buoyed by growing expectations of interest rate cuts among investors, a weaker dollar and geopolitical tensions. Prices for the yellow metal jumped as much as 3% in Monday trade to reach $2,135 per ounce, rising above the previous record of $2,072 notched in August 2020. Prices later fell […]<\/p>\n","protected":false},"author":1,"featured_media":52574,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-52573","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\nGold has never been this expensive | Prosfunds<\/title>\n<meta name=\"description\" content=\"Gold prices hit an all-time high Monday, buoyed by growing expectations of interest rate cuts among investors, a weaker dollar and geopolitical tensions.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/prosfunds.com\/?p=52573\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" 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