International Gold Price Hits New Record High of $3,677.97 per Ounce
The price of the precious metal surpassed the $3,600 per ounce mark on Monday’s trading session and set new historical highs, driven by expectations that the Federal Reserve (Fed) will cut interest rates in the coming week.
Spot gold rose by 1.37%, trading at $3,635.91 per ounce. Bullion reached a historic high of $3,646.29 per ounce throughout the day.
So far in September, gold has shown a 5.4% increase compared to August’s closing price.
Experts Weigh In on the Gold Surge
“The movement was primarily backed by expectations surrounding the Fed’s policy, as the market increasingly considers additional interest rate cuts this year,” said Antonio Montiel, Director of ATFX Education.
He added that the perception of a Fed interest rate cut weakens the US dollar and reduces Treasury bond yields, thereby increasing demand for non-yielding assets like precious metals.
Gabriela Siller, Director of Analysis at Banco Base, stated, “During the session, gold price was driven mainly by a market that starts to anticipate three 25 basis point interest rate cuts by the Fed.”
She emphasized that lower interest rates make non-fixed income investments, such as gold and silver, more attractive.
On the other hand, silver’s price also reached unseen levels since August 2011, closing the session at $41.30 per ounce with a 0.73% gain.
Chinese Demand Supports Gold’s Surge
Antonio Montiel highlighted China’s continued significance in supporting gold prices.
“Recent data indicates an increase in China’s gold imports, both as a strategy for reserve diversification and as a safeguard against yuan volatility and local market instability,” he explained.
Geopolitical tensions, particularly in the Middle East and Eastern Europe, continue to fuel demand for safe-haven assets in an environment where risk aversion remains high.
Key Questions and Answers
- Q: What caused the recent surge in gold prices? A: The primary driver was market expectations of the Federal Reserve cutting interest rates, which weakened the US dollar and increased demand for non-yielding assets like gold.
- Q: How has silver performed alongside gold?
- Q: What role does China play in the gold market? A: China’s increased gold imports, driven by reserve diversification and safeguarding against yuan volatility, support the gold market.
- Q: What geopolitical factors influence gold demand?
