The price of gold continues to rise. The price of a troy ounce (about 31.1 grams) exceeded the $2,700 mark (currently about 2,340 francs) for the first time and sometimes costs almost $2,712. Recently the price was a little lower. The price of gold has been rising sharply for months – a year ago a troy ounce cost less than $2,000.
Traders attribute the latest rise to the upcoming US presidential election, among other things. It is not clear who will win the US election on November 5 – Republican Donald Trump or Democrat Kamala Harris.
« The current polls show Donald Trump on the rise. If he returns to the White House in January, inflation risks are likely to increase significantly,” said Carsten Fritsch of Germany’s Commerzbank. Due to the bleak outlook for US economic policy, investors continue to turn to gold , which is often sought in uncertain times.
In addition, the recent decline in oil prices has eased concerns that inflation could rise more significantly again. From the investors’ point of view, this gives central banks more freedom to cut interest rates – and low interest rates usually boost demand for gold. Investments like fixed term deposits are less attractive.
Impact of US interest rates
If interest rates fall in the United States, this can weigh on the dollar and make gold – which is traded in dollars – more attractive to buyers from other currency areas. In addition, the situation in the Middle East remains tense.
Optimistic market sentiment for gold is unlikely to wane anytime soon, as gold continues to benefit from uncertainty about the global economic situation and geopolitical risks, precious metals trader Alexander Zumpfe of Heraeus wrote in a comment. Silver, platinum and palladium also posted gains this week, reflecting broad-based strength in the precious metals sector.
