The Golden Standard: Gold Prices Soar to Historic Highs

The precious metal, gold, has surged nearly $50 per ounce, surpassing the $2,500 mark and breaking its previous record of $2,484 set in July. Gold futures also breached the $2,500 level earlier this month.

After reaching this peak, gold prices pulled back slightly and are now trading at around $2,495 per ounce. The weakness in the US dollar index (DXY) and falling US Treasury yields have benefited gold. While spot gold surpassed $2,500 for the first time, December gold futures climbed to $2,515 per ounce.

The US dollar has been under pressure amid growing expectations of an interest rate cut by the Federal Reserve in September. Meanwhile, escalating geopolitical tensions have further fueled the demand for gold. Market attention will now turn to Fed Chair Jerome Powell’s speech on Friday. According to Reuters, US producer and consumer price indices released this week indicated that inflation is cooling, which could allow the Fed to deliver a 25-basis point rate cut next month. Chicago Fed President, Austan Goolsbee, stated that the US economy shows no signs of overheating, so central bank officials should be cautious about maintaining a tighter policy for longer than needed.

Everett Millman, the chief market analyst at Gainesville Coins, noted that safe-haven demand for gold is also increasing due to ongoing geopolitical conflicts and the potential for further escalation with Iran’s involvement in the Middle East tensions. Gold bullion is still considered a hedge against geopolitical and economic uncertainties and tends to thrive in low-interest-rate environments.