Recently, the price of gold reached record-breaking highs of more than $2100, or 47,000 Kč, per troy ounce (31.1 grams). Analysts attribute this surge to expectations that the U.S. Federal Reserve will begin to lower introductory interest rates early next year. Currently, interest rates in the U.S. are at their highest level in over two decades.
Before nine o’clock in Central Europe, gold sold for approximately $2080 per ounce. During trading in Asia, the price of the metal reached as high as $2111.39 per ounce, according to the Reuters agency.
Purple Trading analyst Petr Lajsek believes that gold benefits from a weakening dollar. The markets are already anticipating the first interest rate cut, with speculation suggesting it could occur as early as the first quarter of next year.
“This could further pressure the dollar, and gold could continue its rally into next year. Lowering interest rates should favor gold,” said Lajsek.
Conflicts in the Middle East are also boosting the price of gold. In October, these conflicts helped gold approach $2000. “In November, fears of conflict dissipated from the market, and gold fell to $1930 per ounce. However, at the start of December, fears expanded again. A several-day truce in the Middle East was violated, and tension in the Red Sea is also increasing. Drones from Yemen are attacking transport ships, tankers, and even an American destroyer. The Red Sea is a vital transport hub, and instability in this area is another factor that favors gold,” explained Lajsek.
Analysts predict that gold will perform well next year, and its price may rise above current levels. “Gold will be affected by conflicts in Ukraine and the Middle East, which are far from over. Also, the expected fall in interest rates in the U.S. and record demand from central banks for this precious metal,” he added.