The spot price of gold hit a record high of $2,141 an ounce on Tuesday, fueled by increasing safe-haven demand as investors anticipate lower US interest rates. This surge in price marks a significant increase from the previous mark set in December, and reflects a 15% increase in value compared to the same time last year. Analysts predict that local gold prices could reach 38,000 baht per baht-weight this year, citing geopolitical uncertainty and economic apprehension as factors driving the high demand for gold.
The potential easing of US interest rate cuts, combined with ongoing global uncertainties, is expected to continue supporting the demand for gold, according to experts like Ricardo Evangelista from ActivTrades. Recent events such as poor US manufacturing data and easing price pressures have also contributed to the recent $50 increase in gold prices.
Federal Reserve officials, including Atlanta Fed President Raphael Bostic, have signaled the likelihood of interest rate cuts by the end of the year, further boosting investor sentiment towards gold as a safe-haven asset. As investors await Fed chairman Jerome Powell’s testimony and key economic data releases this week, the outlook for gold remains positive.
Despite a decrease in holdings of gold-backed exchange-traded funds, the price of gold has remained resilient in the face of challenges such as the coronavirus pandemic and the war in Ukraine. Analysts at Commerzbank note that despite ETF selling, the price of gold is holding up relatively well, indicating sustained interest in the precious metal.
