Gold bars with a chart in the background
It is not the first-time gold has gone over the $2,000 per ounce mark / Image source: Adobe
  • Gold price surges past $2,100 per ounce
  • Weak US dollar lifts precious metal
  • Traders bet on US interest rate cuts in 2024

Gold prices surged past $2,100 per ounce to a record high helped by a weak US dollar and ongoing conflict in Gaza, Israel and Ukraine.

According to Refinitiv data, gold hit $2,122, up 2% on the day, before falling back to $2,064 per ounce.

Since the start of November, the US dollar has fallen 3.7% against a basket of six major currencies over fears the US economy may be heading for a slowdown, with traders also factoring in a cut in US interest rates in the first half of 2024.

US rate futures were pricing in a 33% chance of a rate cut in March, rising to a 65% probability in May, according to the CME’s FedWatch tool.

This is not the first time gold has gone over the $2,000 per ounce mark. Back in October, the precious metal reclaimed the $2,000 per ounce mantle on the outbreak of the conflict in Gaza.

Discover what conflict in Middle East means for gold and oil

‘One must also consider the attention gold is getting from markets and the media, which in turn could drive more people to put money into funds tracking the price of gold’, commented AJ Bell investment director Russ Mould.

‘Many of these funds purchase the physical gold so more investor demand equates to more buying of gold, which can further push up the precious metal price,’ added Mould.

INVESTOR POPULARITY

Josh Saul, chief executive of investment service the Pure Gold Company said: ‘Stock markets seemed to shrug off the (Hamas) attacks initially, but investors were clearly worried because the gold price was on the rise. It feels like the panic is setting in – we have seen enquiries for both gold and silver at an all-time high.

‘Our customers are buying gold to protect their assets and act as a safety net because the safe-haven properties of gold come into their own during times of volatility.

‘Rate rises have already dampened the property market, and further uncertainty can only add more pressure there. Gold has a long history of maintaining its value when other assets are falling.’

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Ian Conway) own shares in AJ Bell.

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Issue Date: 04 Dec 2023