Gold prices touched an all time high on Wednesday, buoyed by safe haven demands, crossing $4,000 per ounce levels.
The precious metal jumped to $4,002.95 an ounce,as investors piled amid global economic and political tensions, extending a rally that it has already pushed gold more than 50% since the year starting.
"Investors continue to bid up the price of gold, with the precious metal rising more than 50 percent year to date and nearly 12 percent in September alone -- one of the strongest monthly performances on record," Richard Flax, chief investment officer at wealth manager Moneyfarm told AFP.
What’s fueling the rally?
Gold’s reputation as a reliable store of value is proving strong in the face of heightened geopolitical and economic uncertainty. The wars in Ukraine and Gaza have pushed many investors to seek security in the metal.
At the same time, the United States government shutdown and expectations of more rate cuts from the Federal Reserve have weakened the dollar, making the yellow metal more attractive.
Market watchers say worries about the Fed’s independence, following US President Donald Trump’s repeated attacks on the central bank for not cutting rates quickly enough, have also added to the demand. Moreover, growing government debt and uncertainty over tariffs introduced under Trump have made the outlook for other assets less predictable.
Who is leading the purchase?
The World Gold Council (WGC) reported in July that global gold demand rose three percent in the second quarter, reaching 1,249 tonnes. It linked the increase to “an increasingly unpredictable geopolitical environment and price momentum”.
Central banks have continued to buy at “significantly elevated levels due to ongoing economic and geopolitical uncertainty”, the WGC said.
Exchange-traded funds (ETFs), which give investors exposure to gold without trading futures, have also played a major role.
"While early gains this year were driven by tariff-induced volatility in the second quarter, recent momentum has been fuelled by strong sentiment and record inflows into gold-backed exchange-traded funds," Flax said.
However, rising prices have discouraged some buyers. The WGC noted that jewellery demand has slowed as costs have surged.
Other assets attracting buyers?
The gold boom is happening alongside record-breaking performances in other markets. Bitcoin hit a fresh peak of $126,000 on Tuesday, while major stock indices in New York, London and Tokyo have all reached new highs in recent days.
Bitcoin’s latest surge comes "as gold continues its surge, suggesting that investors around the globe continue to look for diversification, though with stocks at record highs too there looks to be plenty of liquidity to go around", said Chris Beauchamp, chief market analyst at trading platform IG.
The precious metal jumped to $4,002.95 an ounce,as investors piled amid global economic and political tensions, extending a rally that it has already pushed gold more than 50% since the year starting.
"Investors continue to bid up the price of gold, with the precious metal rising more than 50 percent year to date and nearly 12 percent in September alone -- one of the strongest monthly performances on record," Richard Flax, chief investment officer at wealth manager Moneyfarm told AFP.
What’s fueling the rally?
Gold’s reputation as a reliable store of value is proving strong in the face of heightened geopolitical and economic uncertainty. The wars in Ukraine and Gaza have pushed many investors to seek security in the metal.
At the same time, the United States government shutdown and expectations of more rate cuts from the Federal Reserve have weakened the dollar, making the yellow metal more attractive.
Market watchers say worries about the Fed’s independence, following US President Donald Trump’s repeated attacks on the central bank for not cutting rates quickly enough, have also added to the demand. Moreover, growing government debt and uncertainty over tariffs introduced under Trump have made the outlook for other assets less predictable.
Who is leading the purchase?
The World Gold Council (WGC) reported in July that global gold demand rose three percent in the second quarter, reaching 1,249 tonnes. It linked the increase to “an increasingly unpredictable geopolitical environment and price momentum”.
Central banks have continued to buy at “significantly elevated levels due to ongoing economic and geopolitical uncertainty”, the WGC said.
Exchange-traded funds (ETFs), which give investors exposure to gold without trading futures, have also played a major role.
"While early gains this year were driven by tariff-induced volatility in the second quarter, recent momentum has been fuelled by strong sentiment and record inflows into gold-backed exchange-traded funds," Flax said.
However, rising prices have discouraged some buyers. The WGC noted that jewellery demand has slowed as costs have surged.
Other assets attracting buyers?
The gold boom is happening alongside record-breaking performances in other markets. Bitcoin hit a fresh peak of $126,000 on Tuesday, while major stock indices in New York, London and Tokyo have all reached new highs in recent days.
Bitcoin’s latest surge comes "as gold continues its surge, suggesting that investors around the globe continue to look for diversification, though with stocks at record highs too there looks to be plenty of liquidity to go around", said Chris Beauchamp, chief market analyst at trading platform IG.
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