Gold prices surged in today’s trading, Tuesday, surpassing the $2,550 per ounce mark for the first time in history, influenced by global geopolitical tensions.
As of 11:14 Moscow time, the futures contracts for the precious metal (Comex) rose by 0.59% to $2,556.25 per ounce, while spot contracts increased by 0.53% to $2,517.59 per ounce.
Similarly, futures contracts for silver climbed by 1.4% to $29.715 per ounce, according to trading data.
The global price of gold has been significantly impacted by a combination of economic factors and geopolitical tensions. The anticipation of rate cuts by the Federal Reserve has been a critical driver. A shift from quantitative tightening to easing, coupled with expected rate cuts, is creating conditions favorable for gold investments. Lower interest rates increase the attractiveness of non-interest-bearing assets like gold, and they often coincide with economic uncertainties that drive investors towards safer assets.
Ongoing conflicts such as the Russia-Ukraine war and tensions in the Middle East, including the Israel-Hamas conflict, have heightened market uncertainties, pushing investors towards gold as a safe haven. The destabilizing effects of these conflicts contribute to gold’s appeal as a stable investment during times of geopolitical strife.
Inflationary pressures and the broader economic outlook also play significant roles. With inflation remaining a concern, gold continues to be viewed as a hedge against inflation. The current economic scenario, characterized by uncertainty about growth and inflation, supports strong gold prices as investors look for secure stores of value.
Moves towards de-dollarization in international trade, such as agreements to use local currencies between countries like Iran and Russia, are influencing the gold market. As confidence in traditional currencies like the US dollar fluctuates, gold’s role as a reliable store of value becomes more pronounced, potentially driving up its price.
Continued purchasing of gold by central banks around the world adds another layer of support to its price. This trend reflects a broader strategy of diversifying reserves and reinforcing financial security by holding gold.
