Reuters reported that global gold prices hit an all-time high on May 20. Spot gold rose 0.9% to $2,440.49 an ounce, breaking the previous record set on April 12. US gold futures also increased by 1%, reaching $2,440.60.
According to Kyle Rodda, a market analyst at Capital, the main drivers for the surge in gold prices are the weakening US dollar and market expectations for an early interest rate cut by the Federal Reserve.
The US Dollar Index remains low, making gold bars priced in the greenback more attractive to buyers holding other currencies.
Recent data suggests a cooling in inflation, and investors are anticipating a 65% likelihood of an interest rate cut by the US in September. Gold is often seen as a hedge against inflation, but high-interest rates make hoarding gold pointless as it provides no return.
Gold prices are soaring and show no signs of slowing down.
Matt Simpson, a senior analyst at City Index, noted that gold prices hit record highs before the opening of the Chinese market. The weak US dollar also boosted the prices of precious metals in China and many other markets.
China is the world’s top consumer of gold bars, and its recent policy moves to revive the struggling real estate sector are being watched closely by market analysts.
Experts now predict that spot gold could rise to $2,447 an ounce, facing resistance at that level. If it breaks through, the next target is $2,455 an ounce.
Silver also saw a significant increase, with spot silver rising 2.5% to $32.28 an ounce after hitting its highest level in over 11 years. Platinum climbed 0.7% to $1,088.75, having reached its highest since December 2023. Palladium, however, fell 0.5% to $1,013.56.
