Gold price at highest level in six months

The price of gold has risen more than 12 per cent since the beginning of October and is currently at its highest level in over six months. Gold's all-time high is listed at $2,074.88 per troy ounce (31,103), this was in early August 2020 after the outbreak of the corona pandemic and the great fear of a severe recession worldwide due to lockdowns. Also April this year, the gold price quoted above $2,000 per troy ounce. This was due to the turmoil in the US banking sector including the collapse of Silicon Valley Bank and, in addition, concerns about the survival of Swiss bank Credit Suisse, which was then forced to come under the roof of industry peer UBS.

Safe haven

At the time of writing, the gold price is quoting around $2,040 per troy ounce. Gold is benefiting greatly from its safe-haven status due to the unrest in the Middle East and the economic and geopolitical uncertainties currently at play. In addition, the US central bank is expected to cut interest rates again in the not too distant future, which will result in a weakening of the dollar. Gold prices are quoted in the US currency and a weaker dollar will make gold cheaper for traders with other currencies, supporting demand.
While the Federal Reserve (Fed) continues to stress that all options are still on the table when it comes to future interest rate policy, the market is strongly anticipating that cuts are coming next year. There are already signs that America's resilience is waning in the current quarter, given the recent cooling in job growth. In addition, the fall in US inflation in recent months is also a signal that the Fed may soon take a turn in interest rates.

December and January positive for gold prices

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said the precious metal traditionally does well in the festive month of December. He added that over the past five years, gold prices have risen 3% on average in the last month of the year. In January too, the precious metal often has the wind at its back, this ahead of the start of the Chinese New Year where there is strong demand for gold in the Asian country.

Gold heading for new record highs?

Technical analyst Mark Newton of US stockbroker Fundstrat also predicted the rise last week. He expects gold to be on its way to new record highs and sees the precious metal rapidly rising to somewhere between $2,060 and $2,080 per troy ounce. Reaching the aforementioned highs will mark ‘a definitive technical breakthrough’, according to Mark Newton, allowing the price to rise even harder. Newton foresees a possible rise to $2,500 per troy ounce in the medium term.
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Conclusion

The gold price is at its highest level in six months. The gold price is benefiting greatly from its safe-haven status due to turmoil in the Middle East and geopolitical and economic uncertainties. In addition, the US central bank is expected to cut interest rates in the not too distant future, which is positive for the gold price. Analysts are also looking positively at the gold price, predicting a possible rise to $2,500 per troy ounce in the medium term.
Disclaimer: The Silver Mountain does not provide investment advice and this article should not be considered as such. Past results are no guarantees for the future.

Sources

• TRADING ECONOMICS. “Gold – price – chart – historical data – news”, z.d. https://tradingeconomics.com/commodity/gold
• Hansen, Ole. “Gold Jumps out of the Gate to Kick off 2023”. Saxo Bank A/S (Headquarters), 4 januari 2023. https://www.home.saxo/content/articles/commodities/gold-jumps-out-of-the-gate-to-kick-off-2023-04012023
• Wilman, Dennis. “Goudprijs richting recordniveau – kan nog stijgen volgens analisten”. Business Insider Nederland, 29 november 2023. https://www.businessinsider.nl/goudprijs-richting-recordniveau-kan-nog-stijgen-volgens-analisten/
• Garrelts, Mark. “Goud glanst weer: Toename geopolitieke risico’s geeft impuls in nieuwe jaar”. Telegraaf, 28 november 2023. https://www.telegraaf.nl/financieel/154471298/goud-glanst-weer-toename-geopolitieke-risico-s-geeft-impuls-in-nieuwe-jaar
• BNR Webredactie. “Goudprijs maakt opmars: ‘All-time high mogelijk’”. bnr.nl, 28 november 2023. https://www.bnr.nl/nieuws/financieel/10533020/goudprijs-maakt-opmars-all-time-high-mogelijk
• Financieel Management. “Goudprijs nadert recordhoogte”. FM.nl – Financieel Management, 29 november 2023. https://financieel-management.nl/artikel/goudprijs-nadert-recordhoogte/
• Soni, Aruni. “Gold Prices Are Headed for All-Time Highs and Could Eventually Hit $2,500, Fundstrat Says”. Markets Insider, 22 november 2023 https://markets.businessinsider.com/news/commodities/gold-prices-outlook-record-high-2500-safe-haven-asset-risk-2023-11