On Thursday, gold reached an all-time high of $2,304.09 per ounce before dipping slightly.
Multiple factors are currently driving the upswing in gold prices.
Michael Langford, chief investment officer at Scorpion Minerals, tells Reuters that "what is driving the gold price is currencies globally depreciating against the U.S. dollar.” He elaborates that “people are acquiring gold as basically a protection against local currency depreciation."
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Bolstered by Rate Cut Talk
According to Euronews Business, gold prices were boosted by ongoing hints from major central banks about interest rate cuts in the next couple of months.
On Wednesday, while addressing the Stanford Business, Government, and Society Forum, the Chair of the US Federal Reserve (the Fed), Jerome Powell, reiterated expectations of rate cuts this year, stating that recent data does not "materially change the overall picture, which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2 percent on a sometimes bumpy path."
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Geopolitical Uncertainty
Another significant driving force behind the gold rally is, of course, geopolitical uncertainty and global instability.
As the Russo-Ukrainian war rages on and the war in Gaza leads to increasing destabilization of the entire region, investors are hedging their bets on gold.
According to the Financial Times, analysts are citing Israel’s recent strike on Iran’s Consulate in Syria on Monday, which killed 12 people, as a major reason for gold’s most recent surge.
In times of war and economic crisis, gold is seen as protection.
As of 12 PM GMT on Thursday, the price had dipped by 0.33% to $2,285.07 per ounce but was overall up nearly 7% for the month and 11.25% year to date.