Gold price hit a record high of over $3,670 per ounce on Tuesday, September 9, driven by the potential rate cut by the Federal Reserve, strong demand from investors, and central banks around the world.
In recent years, gold has been favored by investors as a reliable safe haven asset. The spot gold price reached a historic high of $3,673.95 per ounce on Tuesday and then retreated to $3,637.39 at 2:12 pm Eastern Time. Gold prices have risen by over 38% so far this year.
Analysts predict that in the medium to short term, gold prices will fluctuate in the range of $3,600 to $3,900 per ounce. If economic and geopolitical uncertainties persist, gold prices may challenge $4,000 next year, as reported by Reuters.
The forecasted price of gold has been steadily increasing this year. According to a survey by Reuters in July, analysts predicted an average gold price of $3,220 per ounce for this year, compared to $3,065 in April and $2,756 in January.
Ricardo Evangelista, senior analyst at the international trading company ActivTrades, stated that factors driving the rise in gold prices include market expectations of a Fed rate cut, investors reducing investments in US assets, and economic uncertainties related to tariffs, all of which have weakened the outlook for the US dollar.
Since Trump returned to the White House in January, the US dollar has depreciated by nearly 11%. Expectations of a Fed rate cut are expected to further weaken the dollar, making it cheaper for international buyers to purchase gold, thereby boosting demand. The increase in demand will further drive up gold prices.
According to data from CME Group’s FedWatch, traders expect a 92% chance of a 25 basis point rate cut by the Fed at its September meeting.
Meanwhile, Trump’s criticisms of Fed Chairman Powell and reports of seeking to dismiss Fed governor Lisa Cook have heightened concerns about the Fed’s independence, leading to further gold purchases.
Geopolitical risks are also boosting demand for gold. During times of escalating global conflicts, investors often turn to safe-haven assets like gold. Uncertainties remain high regarding the end of the Russia-Ukraine conflict in Europe and the ongoing conflicts in the Middle East.
Central banks’ purchases of gold have also pushed up prices. The World Gold Council stated that central banks worldwide plan to increase their gold reserves over the next five years while reducing their US dollar reserves.
(This article is for general informational purposes only and does not constitute any recommendation. The Epoch Times does not provide investment, tax, legal, financial planning, or other personal financial advice. For specific investment matters, please consult your financial advisor. The Epoch Times does not bear any investment responsibility.)