https://sputnikglobe.com/20240321/gold-notches-to-new-highs-amid-buying-spree-1117470927.html
Gold Notches to New Highs Amid Buying Spree
Gold Notches to New Highs Amid Buying Spree
Sputnik International
Gold prices hit new all-time high on March 21, 2024.
2024-03-21T17:36+0000
2024-03-21T17:36+0000
2024-03-21T17:36+0000
economy
gold
gold prices
futures
dedollarisation
us federal reserve
world gold council
people's bank of china (pboc)
jerome powell
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The price of gold sprinted to a record high on Thursday.As of 8:54 Moscow time, gold futures expiring in April surged by 2.12 percent to reach $2,206.7 per troy ounce on the COMEX Exchange.Spot gold scaled back to $2,203.84 per ounce by 0153 GMT after soaring to a historic high of $2,222.39 earlier in the session.But experts believe there is still room for gold to gain even more. Prices could reportedly rise to $2,300 per ounce in the second half of 2024.The price of gold previously broke the record on March 6, when April futures on Comex surged past $2,153 per troy ounce. At the time, experts were inclined to believe that traders' interest in gold was driven by speculation that the US Federal Reserve could start to cut interest rates in June.What is driving gold’s bull run?Gold is a time-tested safe-haven asset. Its allure increases in times of rampant inflation, market jitters and geopolitical instability. Here is a rundown of factors likely to be behind the gold market’s rally.Central Bank PoliciesA dovish Fed is one factor possibly at play here. As market experts have stressed to media, there is an inverse relationship between gold prices and interest rates. If the lending rate falls, bullion gains appeal.The rally on Thursday came as the Federal Open Market Committee voted to leave the benchmark rate unchanged at between 5.25 and 5.5 percent. However, they mooted a three quarter-point rate cut in 2024. Fed Chairman Jerome Powell said the US central banking system would likely go for a cut sometime this year.Geopolitical TensionsSkyrocketing geopolitical tensions, like the current spiral of the Palestine-Israel conflict and the ensuing Red Sea crisis, invariably increase the drive to portfolio diversification and the demand for gold as a safe haven. The Ansar Allah movement, also known as the Houthis, which governs large parts of northern and western Yemen from the capital Sana'a, vowed in November 2023 to attack any ships associated with Israel passing through the Red Sea to and from the Suez Canal until it halts military actions in the Gaza Strip. The US-led coalition's ongoing airstrikes against the Houthis’ drone and missile forces have not stopped those attacks. Failure to secure the waterway linking vital trade routes to Europe, the Middle East and Asia added billions of dollars to global commercial shipping costs.The day before Palestinian resistance group Hamas' armed breakout from the Gaza Strip on October 7 last year, the price of gold was $1,834.60/troy ounce. Just 20 days after the attack, the price of the precious metal rose by 8.78 percent to reach $1,995.80/troy ounce.Gold DemandCentral banks around the world have shown record-breaking demand for gold. Liquidity, safety, long-term store of value and lack of default risk all fed into this gold grab. By the third quarter of 2023, global central banks acquired close to 800 tons of the precious metal, according to the World Gold Council.China bought the most gold in 2023, scooping up 224.88 metric tons. The People's Bank of China was the most consistent gold buyer, having bought gold in all quarters of 2023. Next came Poland and Singapore. China's drive to bolster its bullion stockpile came as it reduces holdings in US debt bonds, Chinese media reported analysts as saying.The top five countries with the largest gold central bank purchases as of 2024 are the United States, Germany, Italy, France, and the Russian Federation.De-DollarizationThe West’s economic war against Russia, waged using sweeping sanctions and trade restrictions, coupled with the fact that 2023 proved the dollar’s worst-performing one have all fueled the de-dollarization trend.The dollar has dramatically lost ground against alternatives across Europe and Asia against the backdrop of tectonic transformations in the contours of the global economy.Washington's attempts to use its currency as economic leverage against geopolitical rivals prompted many countries to accelerate a search for safe alternatives to the de-facto global reserve currency. As BRICS countries are replacing US Treasuries with gold, Aakash Doshi, head of commodities research at Citibank, wrote in a recent note that could send the global price far higher than now."The most likely wildcard path to $3,000/oz gold is a rapid acceleration of an existing but slow-moving trend: de-dollarization across Emerging Markets central banks that in turn leads to a crisis of confidence in the US dollar,” Doshi wrote.
https://sputnikglobe.com/20240311/houthis-vow-more-surprises-for-us-israel-while-schooling-west-in-asymmetric-warfare-1117271756.html
https://sputnikglobe.com/20240102/dollars-battering-in-2023-just-the-start-as-brics-strives-for-dedollarization-1115951713.html
https://sputnikglobe.com/20230820/is-it-a-good-idea-to-invest-in-gold-1112742707.html
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price of gold, gold prices hit new all-time high, why is price of gold soaring, is gold worth buying, fed rate cuts, dedollarization, trend to ditch the dollar,
price of gold, gold prices hit new all-time high, why is price of gold soaring, is gold worth buying, fed rate cuts, dedollarization, trend to ditch the dollar,
Gold Notches to New Highs Amid Buying Spree
The price of gold surged last year as central banks eagerly bolstered their gold holdings. A World Gold Council survey asked what prompted the 'gold rush'. The five most common reasons were historical position, performance in times of crisis, long-term store of value, portfolio diversification and lack of default risk.
The price of gold sprinted to a record high on Thursday.
As of 8:54 Moscow time, gold futures expiring in April surged by 2.12 percent to reach $2,206.7 per troy ounce on the COMEX Exchange.
Spot gold scaled back to $2,203.84 per ounce by 0153 GMT after soaring to a historic high of $2,222.39 earlier in the session.
But experts believe there is still room for gold to gain even more. Prices could reportedly rise to $2,300 per ounce in the second half of 2024.
The price of gold previously broke the record on March 6, when April futures on Comex surged past $2,153 per troy ounce. At the time, experts were inclined to believe that traders' interest in gold was driven by speculation that the US Federal Reserve could start to cut interest rates in June.
What is driving gold’s bull run?
Gold is a time-tested safe-haven asset. Its allure increases in times of rampant inflation, market jitters and geopolitical instability. Here is a rundown of factors likely to be behind the gold market’s rally.
A dovish Fed is one factor possibly at play here. As market experts have stressed to media, there is an inverse relationship between gold prices and interest rates. If the lending rate falls, bullion gains appeal.
The rally on Thursday came as the Federal Open Market Committee voted to leave the
benchmark rate unchanged at between 5.25 and 5.5 percent. However, they mooted a three quarter-point rate cut in 2024. Fed Chairman Jerome Powell said the US central banking system would likely go for a cut sometime this year.
Skyrocketing geopolitical tensions, like the current spiral of the Palestine-Israel conflict and the ensuing
Red Sea crisis, invariably increase the drive to portfolio diversification and the demand for gold as a safe haven.
The Ansar Allah movement, also known as the Houthis, which governs large parts of northern and western Yemen from the capital Sana'a, vowed in November 2023 to attack any ships associated with Israel passing through the Red Sea to and from the Suez Canal until it halts military actions in the Gaza Strip.
The US-led coalition's ongoing airstrikes against the Houthis’ drone and missile forces have not stopped those attacks. Failure to secure the waterway linking vital trade routes to Europe, the Middle East and Asia added billions of dollars to global commercial shipping costs.
The day before Palestinian resistance group Hamas' armed breakout from the Gaza Strip on October 7 last year, the price of gold was $1,834.60/troy ounce. Just 20 days after the attack, the price of the precious metal rose by 8.78 percent to reach $1,995.80/troy ounce.
Central banks around the world have shown record-breaking demand for gold. Liquidity, safety, long-term store of value and lack of default risk all fed into this gold grab. By the third quarter of 2023, global central banks acquired close to 800 tons of the precious metal, according to the World Gold Council.
China bought the most gold in 2023, scooping up 224.88 metric tons. The People's Bank of China was the most consistent gold buyer, having bought gold in all quarters of 2023. Next came Poland and Singapore. China's drive to
bolster its bullion stockpile came as it reduces holdings in US debt bonds, Chinese media reported analysts as saying.
The top five countries with the largest gold central bank purchases as of 2024 are the United States, Germany, Italy, France, and the Russian Federation.
The West’s economic war against Russia, waged using sweeping sanctions and trade restrictions, coupled with the fact that 2023 proved the dollar’s worst-performing one have all fueled the
de-dollarization trend.
The dollar has dramatically lost ground against alternatives across Europe and Asia against the backdrop of tectonic transformations in the contours of the global economy.
Washington's attempts to use its currency as economic leverage against geopolitical rivals prompted many countries to accelerate a search for safe alternatives to the
de-facto global reserve currency.
As
BRICS countries are replacing US Treasuries with gold, Aakash Doshi, head of commodities research at Citibank, wrote in a recent note that could send the global price far higher than now.
"The most likely wildcard path to $3,000/oz gold is a rapid acceleration of an existing but slow-moving trend: de-dollarization across Emerging Markets central banks that in turn leads to a crisis of confidence in the US dollar,” Doshi wrote.
20 August 2023, 17:14 GMT
