Gold price rises to record high

The spot price of gold rose 1.4% to $2,113.28 per troy ounce on Monday 4 March, its highest level since 4 December 2023. On Tuesday, even this peak was surpassed and gold reached a new all-time high in euros, the price of gold then rose to $2,141.79 (1,970.08 euros) per troy ounce. Later in the day, gold prices flattened again to around $2,131 dollars (1960.16 euros) per troy ounce.
In particular, expectations that US interest rates could come down soon are now having a major impact on gold prices. Lower interest rates (and speculation about them) result in the weakening of the dollar, this makes gold cheaper for traders with other currencies. This creates more demand for gold and this then drives the price of gold.

Gold price forecast

According to several analysts, gold's future outlook is positive. CME FedWatch Tool deem a 66% chance of an interest rate cut by the Fed in June, something that could be positive for the gold price. CME FedWatch is a tool that collects data from the options market to gauge market participants' expectations regarding future changes in Federal Reserve monetary policy, particularly with regard to interest rates.
Jim Wyckoff, senior analyst at Kitco Metals, says that if inflation rates remain subdued, the likelihood that gold will continue to rise is high. Finally, Ole Hansen, head of commodity strategy at Saxo Bank, wrote that increased geopolitical tensions around the world have reduced the willingness to short sell, all of which have provided gold's current buy-on-dips credentials.  This sentence refers to a situation where geopolitical tensions are increasing around the world, resulting in a reduced willingness to speculate on a fall in the price of gold. This in fact reinforces gold's credibility as a valuable asset to be bought when the price falls, a strategy known as buy-on-dips.
Disclaimer: The Silver Mountain does not provide investment advice and therefore this article should not be considered as such. Past results do not guarantee future results.

Sources

• DPG Media Privacy Gate. (2024, 5 march). https://www.hln.be/geld/goudprijs-stijgt-tot-recordhoogte-door-hoop-op-renteverlaging-vs~a2dfd16e1/?referrer=https%3A%2F%2Fwww.google.com%2F
• Dempsey, H., & McDougall, M. (2024, 5 march). Gold price surges to record high. Financial Times. https://www.ft.com/content/72ae7a4a-83fe-4e55-8265-4278204c1d5d
• Anil, A. (2024, 4 march). Gold Advances to three-month high on rising rate cut bets. Reuters. https://www.reuters.com/markets/commodities/gold-near-two-month-peak-anticipation-builds-june-us-rate-cut-2024-03-04/d