Benzinga - by Zaheer Anwari, Benzinga Contributor.
- Gold prices have hit a new record of $2,450 per ounce, influenced by anticipations of a U.S. Federal Reserve rate cut.
- Hedge funds have increased their bullish investments in gold futures.
- Gold's value has surged 17% since the beginning of the year, with predictions suggesting it might reach up to $3,000.
This increase is mainly due to the expectation that the US Federal Reserve might lower interest rates by September, making gold more attractive to investors looking to preserve value.
Investor interest in gold has also grown, particularly among hedge funds, which have increased their bullish bets on gold futures.
This high demand highlights gold's status as a preferred safe-haven asset, especially during economic uncertainty and geopolitical conflicts.
Tensions in regions like Russia and the Middle East have further driven investors towards the safety of gold. Additionally, silver prices have also risen significantly, nearing an 11-year high.
Focusing on gold’s recent performance, the precious metal has not only moved beyond the April 12th all-time high of $2,431, but has also maintained a strong upward trend throughout 2024.
Since the start of the year, gold has risen by an impressive 17%, with projections indicating further increases, potentially reaching $2,500 and even aiming for the significant $3,000 level.
The path to these record highs has had its ups and downs. For example, just before its latest surge, gold experienced a 6% dip between April 12th and May 3rd.
Despite occasional dips, market sentiment remains strong. This is evident from the current buying momentum, with a 6% increase in May alone. This rise follows a period of consolidation where gold prices fluctuated between $1,600 and $2,100 from August 2020 to March 2024, before eventually breaking out.
This demonstrates the metal’s resilience and continued investor confidence in its value as both an asset and an investment.
After the closing bell on Monday, May 20, the commodity closed at $2425, trading up by 0.44%.
This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.
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