Current:Home > reviewsThe price of gold keeps climbing to unprecedented heights. Here’s why -TrueNorth Capital Hub
The price of gold keeps climbing to unprecedented heights. Here’s why
View
Date:2025-04-13 23:38:01
NEW YORK (AP) — The rush for gold just keeps coming.
Gold hit another all time high this week. Recent gains for the precious metal are largely credited to ongoing economic uncertainty, geopolitical tensions and strong demand from central banks around the world.
If trends continue, analysts have bullish outlooks on the price of gold for the months ahead. But the future is never promised. Here’s what you need to know.
Where does the price of gold stand today?
The New York spot price of gold closed Tuesday at just over $2,657 per Troy ounce — the standard for measuring precious metals, which is equivalent to 31 grams — the highest recorded to date, per FactSet. That would make a gold bar or brick weighing 400 Troy ounces worth more than $1.06 million today.
This week’s record high means that the price of gold has climbed hundreds of dollars per Troy ounce over the last year. Tuesday’s price is up nearly $145 from a month ago and more than $740 from this time in 2023.
The price of gold is up nearly 30% year to date, analysts note — outpacing the benchmark S&P 500’s roughly 20% gain since the start of 2024.
Why is the price of gold going up?
There are a few factors behind the recent gains.
Interest in buying gold often comes at times of uncertainty — with potential concerns around inflation and the strength of the U.S. dollar, for example, causing some to look for alternative places to park their money. Gold also surged in the early days of the COVID-19 pandemic.
Among sources of uncertainty today are geopolitical tensions — which escalated over recent days with Israel’s deadly strikes in Lebanon. And the ongoing wars in Gaza and Ukraine have continued to fuel fears about the future worldwide.
In markets like the U.S., there’s also particular concern about the health of the job market. Last week’s larger-than-usual half-point cut by the Federal Reserve signals a new focus on slowing employment numbers, and more rate cuts are expected before the end of the year. And such action arrives in the midst of a tumultuous election year — which could prove crucial to economic policy in the road ahead, too.
In the near future, people are considering “any case of turbulence in the economy,” FxPro senior market analyst Michel Saliby explained. “This is why they’re keeping a decent portion of gold in their portfolio as a ‘safe haven.’”
Analysts also point to strong demand from central banks around the world. Joe Cavatoni, senior market strategist at the World Gold Council, noted last month that central bank demand was well-above the five year average — reflecting “heightened concern with inflation and economic stability.”
Recent stimulus measures in China aimed at boosting consumer spending are also expected to up retail investments, Saliby added, further boosting gold’s performance.
Is gold worth the investment?
Advocates of investing in gold call it a “safe haven,” arguing the commodity can serve to diversify and balance your investment portfolio, as well as mitigate possible risks down the road. Some also take comfort in buying something tangible that has the potential to increase in value over time.
Experts caution against putting all your eggs in one basket.
Both retail and institutional investors shouldn’t be influenced by the “FOMO effect,” or fear of missing out, Saliby notes — explaining that people should not risk all their money just because they are seeing others rake in gains. He advises investors to watch the market and always have a clear risk management strategy for their position.
If geopolitical tensions cool, Saliby expects the price of gold to correct slightly, perhaps falling around $50 to $80. But he remains bullish overall for the near future — expecting gold’s spot price to soon surpass the $2,700 mark previously predicted for 2025, and perhaps reach as high as $2,800 or $2,900 if trends continue.
Still, future gains are never promised and not everyone agrees gold is a good investment. Critics say gold isn’t always the inflation hedge many say it is — and that there are more efficient ways to protect against potential loss of capital, such as through derivative-based investments.
The Commodity Futures Trade Commission has also previously warned people to be wary of investing in gold. Precious metals can be highly volatile, the commission said, and prices rise as demand goes up — meaning “when economic anxiety or instability is high, the people who typically profit from precious metals are the sellers.”
If you do choose to invest in gold, the commission adds, it’s important to educate yourself on safe trading practices and be cautious of potential scams and counterfeits on the market.
veryGood! (9851)
Related
- 'No Good Deed': Who's the killer in the Netflix comedy? And will there be a Season 2?
- Hugh Jackman and Deborra-Lee Furness announce their separation after 27 years of marriage
- Book excerpt: Astor by Anderson Cooper and Katherine Howe
- Shedeur Sanders sparks No. 18 Colorado to thrilling 43-35 win over Colorado State in 2 OTs
- Who's hosting 'Saturday Night Live' tonight? Musical guest, how to watch Dec. 14 episode
- Photographer captures monkey enjoying a free ride on the back of a deer in Japanese forest
- Man shot by police dies following car chase in Rhode Island, teen daughter wounded
- Bernie Taupin says he and Elton John will make more music: Plans afoot to go in the studio very soon
- SFO's new sensory room helps neurodivergent travelers fight flying jitters
- Halle Berry Says Drake Used Slime Photo Without Her Permission
Ranking
- Meta releases AI model to enhance Metaverse experience
- $245 million slugger Anthony Rendon questions Angels with update on latest injury
- California lawsuit says oil giants deceived public on climate, seeks funds for storm damage
- Family of man killed by police responding to wrong house in New Mexico files lawsuit
- Why Sean "Diddy" Combs Is Being Given a Laptop in Jail Amid Witness Intimidation Fears
- Mood upbeat along picket lines as U.S. auto strike enters its second day
- Zibby’s Bookshop in Santa Monica, California organizes books by emotion rather than genre
- California sues oil giants, saying they downplayed climate change. Here's what to know
Recommendation
New Mexico governor seeks funding to recycle fracking water, expand preschool, treat mental health
Poison ivy is poised to be one of the big winners of a warming world
Anchorage scrambles to find enough housing for the homeless before the Alaska winter sets in
Top EU official heads to an Italian island struggling with migrant influx as Italy toughens stance
Civic engagement nonprofits say democracy needs support in between big elections. Do funders agree?
When do bird and bat deaths from wind turbines peak? Fatalities studied to reduce harm
NYC day care owner, neighbor arrested after 1-year-old dies and 3 others are sickened by opioids
Joe Biden defends UAW strike; tells industry they must share record profits