Record Gold Prices: For the First Time, a Gold Bar is Worth $1 Million
The Continual Rise of Gold Prices
The price of gold is setting records and remains steady near its historic high.
Currently, spot gold is trading around $2,500 per ounce ahead of the European session, while U.S.
gold futures sit at $2,537.
For the first time, a gold bar has reached a staggering value of one million dollars.
This milestone was achieved on Friday when the spot price of the precious metal surpassed $2,500 per troy ounce, marking a historic peak.
Given that gold bars typically weigh around 400 ounces, each one is now worth over one million dollars.
Factors Driving the Gold Surge
Gold prices have increased by over 20% since the beginning of the year.
This surge is attributed to optimism regarding the Federal Reserve’s potential interest rate cuts in September, strong purchases from central banks, and heightened safe-haven demand due to tensions in the Middle East.
At this juncture, traders are exhibiting caution, awaiting signals regarding the Federal Reserve’s interest rate trajectory before making directional bets on gold prices.
Will the record for gold bars continue? What can we expect?
Gold’s Stability Amid Anticipation
Gold maintains its stability close to its historic peak as investors await the U.S.
Federal Reserve’s minutes and President Jerome Powell’s speech for guidance on upcoming rate cuts this year.
The allure of gold bars typically rises in an environment of low interest rates.
Therefore, the central bank is under the spotlight of metal traders.
Analysts predict the Fed will cut rates by 25 basis points in each of the three remaining meetings of 2024, with a slim majority of economists in a Reuters poll dismissing recession concerns.
Central Bank Purchases Fueling Demand
In the first half of this year, net gold purchases by central banks totaled 483.3 tons, equivalent to almost 40,000 bars, according to Bloomberg’s calculations based on Metals Focus data.
This has been a key factor sustaining the precious metal’s recent rally, alongside expectations for more accommodative policies from the Fed.
Furthermore, increasing demand for gold as a safe-haven asset, driven by rising geopolitical risks and uncertainty leading up to the U.S.
elections in November, has also contributed to this spike.
Will this bullish trend persist?
Outlook for Gold Prices
Accommodative expectations from the Fed, along with geopolitical risks, are likely to continue supporting the XAU/USD, helping to limit potential declines.
Market strategist Yeap Jun Rong suggests that from a technical standpoint, prices could target a move towards $2,665.
ING analysts forecast that gold will average $2,380 per ounce in the third quarter, with prices climbing to $2,450 per ounce in the fourth quarter for an annual average of $2,301 per ounce.
