Gold prices surpassed 3,080 dollars on Friday, driven by consistently strong demand from central banks and investor fears of geopolitical and trade risks.
On the physical market, an ounce of gold was priced at 3,083.33 dollars in morning trading, up 0.9 percent from yesterday’s market close. The price briefly reached 3,086.21 dollars, the highest level since gold began trading on the exchange. In the U.S. market, gold was traded today in futures contracts at a price one percent higher, at 3,092.50 dollars.
– “Everything is currently in favor of gold, including U.S. trade and fiscal policy, geopolitics, and slowing growth,” explains Kyle Rodda from Capital.com.
Prices have breached the psychological barrier of 3,000 dollars due to cuts in key interest rates in major economies, geopolitical conflicts, central bank purchases, and the uncertainty created by a wave of tariffs, which we have previously reported in Lider.
Gold Haven
Investors traditionally buy gold to protect the value of their assets during periods of heightened political instability and to hedge against falling interest rates. Central banks are also trying to strengthen their balance sheets and secure supplies during periods of geopolitical and economic tensions. Under such conditions, gold rose by more than 28 percent last year.
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Central banks are expected to continue buying gold this year, as estimated by the WGC in December. China has been purchasing gold for the fourth consecutive month, according to central bank data.
Just a few days ago, Citi Research raised its target price for gold for the next three months to 3,200 dollars per ounce, up from an initial estimate of 3,000 dollars, citing strong demand in the sector and increased demand from exchange-traded funds. They noted that gold prices could reach 3,500 dollars per ounce by the end of the year, supported by much higher demand for investment protection as investors fear stagflation in the U.S.
Domestic financiers have also agreed with this view, stating that they expect the upward trend to continue due to ongoing uncertainty stemming from the introduction of protectionism by the U.S. president and continued demand from central banks.
It should also be noted that the renowned London Bullion Market Association (LBMA) has forecast that the price of gold could reach an incredible seven thousand dollars per ounce by 2030, which may also need to be taken into account.
