Gold Price Reached New Record High of $2,383 per ounce

The price of gold closed on Monday again at the highest level – 2,383 dollars (56,480 CZK) per troy ounce (31.1 grams). And on Tuesday afternoon, the value went up by another dollar. Since the beginning of the year, the price of the metal has increased by 15 percent, which is an increase largely due to the nature of this investment instrument.

Gold is rising due to a number of factors: large purchases by global central banks that are filling their vaults, geopolitical tensions and expected US rate cuts, the US server said CNBC.

Over the weekend, heightened tensions in the Middle East, when Iran sent more than 300 missiles and drones to Israel, increased gold’s appeal as a safe haven in the eyes of investors.

Markets are now closely watching Israel’s retaliation. If it is a strong response that could lead to a wider conflict, it would encourage more intense gold buying. It is likely that oil prices would rise further and the already strong US dollar would continue to strengthen, Bartosz Sawicki, an analyst at Conotoxia, told CNBC.

Gold is primarily a store of value, and tends to do well in times of economic uncertainty when investors move away from riskier assets such as stocks. As interest rates fall, gold becomes more attractive compared to fixed income assets such as bonds, which then carry weaker yields.

Interest rate cuts are expected to begin in the US or the Eurozone this summer. However, March US inflation was higher than expected, pushing market expectations for the first rate cut between June and September. By the end of the year, the US central bank (Fed) should only cut rates twice, while it was originally expected to do it three times.

Nevertheless, analysts at US banks are optimistic about the continued growth of gold. “We expect gold to cost $3,000 (CZK 71,100) per ounce in the next six to 18 months,” Citi analysts said in a note to clients on Monday.

Goldman Sachs colleagues have the same view on gold, which has already called the gold market an “unpredictable bull market” and revised the price target for the yellow metal from $2,300 to $2,700 an ounce by the end of the year.