Gold is continuing its amazing bull run and appears likely to soon cross another benchmark: $2,300 an ounce.
At press time, gold was trading at a record $2,295 an ounce. To show how quickly the spot price has risen: It first topped $2,200 less than two weeks ago, and just broke the $2,100 mark in December.
The record-breaking run has caused many analysts to up their forecasts for gold prices. In mid-March, J.P. Morgan’s head of commodities research, Natasha Kaneva, told Bloomberg TV that she sees a “possibility” of gold hitting $2,500 an ounce this year.
Analysts have credited the yellow metal’s hot streak to a range of factors—but mostly to indications from Federal Reserve chair Jerome Powell that the Fed will cut interest rates later in the year, when inflation has cooled. (Today, Powell suggested it may take a while for that to happen.) There’s also general global instability, particularly due to wars in the Middle East and the Ukraine, as well as concern about the upcoming U.S. election.
Global jewelry demand may also be playing a role, according to a February report from Goldman Sachs Research.
“The rapidly growing cohort of ‘affluent’ consumers in India…will drive growth in jewelry consumption,” it said. “Moreover, gold consumption has also been supported by a lack of alternative investments in some countries which saw big policy shifts (Turkey, China) in the past few years.”
An additional factor in the price surge has been strong interest in gold from central banks. Krishan Gopaul, World Gold Council (WGC) analyst for Europe, the Middle East, and Asia, noted that central banks increased their gold purchases by 19 tons in February, the ninth straight month those purchases have risen. The WGC has said banks favor “gold’s value in crisis response, diversification attributes, and store-of-value credentials.”
(Photo: Getty Images)
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