Gold futures reached unprecedented heights last Monday, driven by speculation that the Federal Reserve may reduce interest rates later this year.
On this surge, the April gold contract increased by $30.60, or 1.46%, to $2,126.30 per ounce, setting a record since 1974.
For the second day in a row, gold prices broke records, with the April contract previously closing at a historic $2,095.70.
The VanEck Gold Miners ETF (GDX) also went up by 4.3%, marking its third day of gains. It exceeded its 50-day moving average for the first time since mid-January.
According to Peter Boockvar from Bleakley Financial Group, gold’s peak, adjusted for inflation, was around $3,200 in 1980. He believes gold might reach this level again.
“There’s still room to grow,” Boockvar commented, pointing out the upside potential.
Gold has thrived despite a strong dollar and high interest rates, largely thanks to worldwide central banks buying gold following the US and EU’s freezing of Russia’s reserves after Ukraine’s invasion.
With expectations of the Fed slashing rates as inflation eases, gold’s value is poised to increase. Lower rates often make gold more appealing as they decrease the allure of bonds.
Yet, gold’s ascent could slow if economic indicators, particularly job data, show strength.
Since the year began, gold has risen by 2.63%. Gold’s appeal grows amid economic uncertainty and central bank maneuvers, reaffirming its status as a safe investment.