Gold prices exceeded on Friday the $2400 per ounce mark, achieving a historic high, and are on track to gain for the fourth consecutive week amid escalating tensions in the Middle East. In spot transactions, the price of gold dropped by 1.19% to $2344.25 per ounce after it had climbed to a record level of $2428.93.
U.S. gold futures increased by 0.1% at settlement to $2374.1, driven by the rising tensions in the Middle East that spurred investors towards this safe haven. Platinum broke through the $1000 per ounce barrier, reaching its highest level in nearly four months. As for other precious metals, silver fell by one percent in spot transactions to $28.21 per ounce, after recording its highest levels since early 2021. Platinum rose by 0.6% to $985.65, and palladium increased by 0.9% to $1055.62, with all three metals poised for weekly gains.
Recent global events and economic conditions have been significant drivers in the surge of gold prices. A combination of geopolitical tensions, such as the conflicts between Israel and Hamas, and the proxy attacks by Iran on US warships, has escalated concerns and driven investors towards gold as a safe haven. Additionally, the weakening U.S. dollar and the anticipation of Federal Reserve rate cuts have also played crucial roles in boosting gold prices to new highs. The shift towards decentralizing the dollar in international trade, with countries like Iran and Russia opting for local currencies, and the growing momentum of non-SWIFT inter-banking systems, are further influencing the dynamics of global trade and the appeal of gold.
Financial forecasts from institutions like J.P. Morgan and Goldman Sachs anticipate that gold prices could continue to rise. J.P. Morgan predicts that gold could reach up to $2,300 per ounce by 2025 due to expected Fed rate cuts and a consequent decrease in real U.S. yields. Goldman Sachs also sees a positive trajectory for gold, projecting a 6% increase in the next 12 months, driven by strong central bank purchases and robust retail demand in emerging markets.
In addition to these factors, central banks have significantly increased their gold reserves, which has supported high prices. The World Gold Council noted that central bank demand for gold was extremely strong in 2023, continuing a trend from the previous years.
