The price of gold is forecast to close at a record-high before the end of this year, as investors seek a safer haven amid global headwinds.
The price of gold inched up by 0.22 percent on Tuesday (Manila times), hitting a historic high of $3,755 per ounce.
Among the factors cited for the rise of the price of gold are geopolitical risks, central banks trading and stacking the commodity, and the ballooning debt of the United States that has reached over $37 trillion. Also, the US economy has been bugged by weak inflation figures and increasing unemployment data, which are key factors for the Federal Reserve to determine the setting of policy rates.
China is also seen as a major player in the global gold market.
“The upward trend in gold prices seems likely to continue as several tailwinds like central bank purchases and strong investor demand in China remain key drivers of the rally. As a result, gold prices will probably reach $4,000 per ounce over the next year,” said Hamad Hussain, a climate and commodities economist at Capital Economics.
Expected rate reductions by the US Fed before the end of the year will have a strong effect on gold prices.
In its latest meeting, the US Fed reduced policy rates by 25 basis points (bps), prompted by weak inflation figures and increasing unemployment data.
The next meeting of the US Fed to decide on policy rates is in October and December.
However, there are still investors who are hesitant in investing in gold, among them the Japanese.
“Gold is emerging as highly relevant amid its record-shattering rally in recent years and the current inflationary environment in Japan. Despite this, gold remains under-present in Japanese investor portfolios, raising these key questions for financial advisors, institutional investors, and product providers,” a commentary titled “2025 Japanese gold investor insights: The golden opportunity” posted in the gold.org website said.
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