Gold|Expectations of the US central bank’s interest rate cuts raise the price of gold even more.
Use it the market price has been setting new records for some time. Now the bullishness is already so strong that the market predicts that the price of gold can rise to as high as $3,000 per ounce by the middle of next year.
This is what the analysts of the financial company Citi predict, according to financial news media CNBC. By the end of this year, they say, the price of gold could average $2,550 per ounce. One ounce equals about 30 grams.
Even more moderate estimates predict that the price of gold will reach $2,700 by the middle of next year. This is what the financial group UBS estimates, according to the news agency Bloomberg.
In July, the price of gold broke the $2,500 mark. On Tuesday, the price broke above the $2,520 mark for the first time and briefly reached $2,530. New records have been broken for three days in a row.
In total, the price of gold has risen by 21 percent since the beginning of the year until Tuesday. This makes it one of the best performing commodities this year. In a year, the price of gold has risen by about 30 percent.
Last in the past few weeks, the price of gold has been boosted by expected interest rate cuts. The US central bank, the Federal Reserve, is expected to lower its key interest rate in September.
This has already pushed bond interest rates down and thus increased the attractiveness of gold as an investment. Unlike fixed income and stock investments, gold offers no return other than appreciation.
More information on the Fed’s thoughts is expected at the end of the week, when central bankers gather for their annual meeting in Jackson Hole, Wyoming, USA. Director general Jerome Powellin the speech is expected on Friday.
Traditionally, gold is known as a safe haven, where funds are transferred when there is uncertainty in the air. Uncertainty raises the price of gold.
Right now, there is enough uncertainty regarding the situations in the Middle East and Ukraine, for example.