The price of gold rose to more than $2,153 per troy ounce and broke a new record. The previous historical maximum was set the day before, on March 5. The rise in gold prices is taking place against the backdrop of geopolitical tensions and expectations of a cut in the Fed’s key rate. According to preliminary estimates by the World Gold Council, in January, global central banks purchased 39 tons of gold for gold and foreign exchange reserves
The price of gold on Wednesday, March 6, rose to more than $2,153 per troy ounce and updated its historical record, according to trading data. As of 17:34 Moscow time, the price of April gold futures was $2,153.7 per troy ounce (+0.91%).
The previous historical record was reached the day before, on March 5, when gold prices rose by 1.3% and reached $2,141.79 per troy ounce. Bloomberg wrote that this was facilitated by the expectation of monetary easing, geopolitical tensions and the risk of a decline in stock markets. The agency noted that the expectation of a cut in the key interest rate by the US Federal Reserve (FRS) has been supporting gold since mid-February. The probability of a rate cut in June 2024 is 64%, Bloomberg indicated.
“Speculation about a change in Fed rates and ongoing geopolitical tensions support interest in gold,” Eva Manthey, a commodity strategist at ING Groep, told the agency. “We expect gold prices to rise this year,” the expert said. This is due to “ongoing wars and the upcoming US elections.”
At the same time, according to data from the World Gold Council (WGC), in January 2024, central banks replenished global gold reserves by 39 tons. This was more than double the revised December net purchases of 17 tonnes. January was the eighth consecutive month of net gold purchases for reserves by global central banks, the organization reported. The largest buyer of gold in January was the Central Bank of Turkey, which increased its official gold reserves by 12 tonnes. At the same time, the gold reserves of the Bank of Russia decreased by three tonnes.
Before this, the price of gold rose to a historical maximum on December 4, 2023. Then it exceeded the $2,150 mark per troy ounce. CNBC wrote that gold traditionally rises in price during periods of economic and geopolitical instability due to its status as a reliable safe haven asset. According to the TV channel, the price of gold has been increasing for the second month in a row amid the ongoing war between Israel and Hamas and the expected reduction in interest rates.