Gold’s steady rise continues, and today was its second straight session of breaking all-time highs. Investors are flocking to the long-term safe haven in preparation of future interest rate cuts.
The price of gold rose sharply to $2,111.39 an ounce, which was much higher than its previous high point set in August 2020 and higher than its previous high point on Friday night. At the same time as this meteoric rise, there are more and more rumors that the age of interest rate hikes that has been going on for the past few years is over. Now, most people think that central banks will focus on lowering the cost of getting money all through 2024.
A weaker dollar usually drives up the price of gold, which is measured in dollars. This rise is due in large part to the negative relationship between the US dollar and gold.
Gold hits new all-time high pic.twitter.com/nAckjfdVsH
— Simon Brown (@SimonPB) December 4, 2023
According to the most current market charts, gold has been steadily going up since early October, when it was trading at $1,820 an ounce.
At the same time, crypto assets were going crazy. For example, Bitcoin broke through $40,000 today for the first time this year. Some traders think that the US Federal Reserve might start cutting interest rates by spring, which would make the trend go up.
Kyle Rodda, a senior financial market expert at Capital.com, says that this rise is because the market thinks that the Fed will soon lower interest rates, maybe even as early as March. Because of this feeling, both gold and Bitcoin reached important levels. Gold broke its previous record high, and Bitcoin passed the $40,000 mark, which it had not seen since May 2022.
When interest rates are low, it’s easy to see why people are drawn to gold. Gold doesn’t have any return like bonds, stocks, or regular savings accounts. Because of this, buyers are looking for safety in the long-term value of gold as interest rates are expected to go down.