Gold hits $2,500 per ounce, reaching historic highs ever

Gold prices reached historic highs on August 1, breaking the $2,500 mark on the New York Comex exchange. The precious metal reached a price of $2,502.6 for the first time in its history, influenced by the U.S. Federal Reserve’s decision to leave interest rates unchanged, geopolitical risks, and the constant demand from central banks.

Gold has kept price movement up, reaching historic highs for the second time in July. The precious metal reached a record price of $2,502.6 per troy ounce in New York Comex markets on Wednesday, breaking the $2,500 mark for the first time in its trading history. The price uptick would be associated with a series of financial and geopolitical factors analysts believe will keep powering this rally.

The U.S. Federal Reserve recently announced that it would not increase or cut the interest rates, maintaining them at the current 5.25-5.5% yearly. This affected the dollar exchange rates and gold prices in dollars.

Another factor driving gold prices up is the geopolitical situation that investors are constantly monitoring, such as the conflict between Ukraine and Russia and the deepening conflicts in the Middle East, which increase the demand for gold as a haven asset.

In addition, the constant demand from central banks, which according to the World Gold Council (WGC) grew their holdings by 6% since last year, is collaborating with this price upswing. While the People’s Bank of China (PBOC) stated that it stopped buying gold, reports indicate that this might not be true and that it could be purchasing gold secretly to take advantage of lower prices.

Analysts expect this rally to continue, given that these factors are unlikely to be resolved in the short term. A central bank survey by the WGC showed that reserve allocations from central banks are likely to continue growing during the next year, pushed by a need for portfolio protection and diversification in an unpredictable economic environment.

News.Az