Last year the price of gold was below $2,000. The enormous price increase has various reasons.
The price of gold continues to soar. The price for a troy ounce (around 31.1 grams) broke the $2,700 mark for the first time and at times cost almost $2,712. Recently the price was slightly 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 increase to, among other things, the upcoming US presidential election. It is unclear who will win the US election on November 5th – the Republican Donald Trump or the Democrat Kamala Harris. Given the unclear outlook for US economic policy, investors continue to turn to gold, which is often sought after in uncertain times.
In addition, the recent decline in oil prices has dampened concerns that inflation could pick up more significantly again. From the perspective of investors, this also gives central banks more leeway to cut interest rates – and low interest rates usually promote demand for gold. Investments such as fixed-term deposits are then comparatively less attractive.
If interest rates in the USA fall, this can weigh on the dollar and make gold – which is traded in dollars – more attractive to buyers from other currency areas. Furthermore, the situation in the Middle East remains tense.