Gold Prices Reach Record Highs Of $2,100, Analysts Say

(CTN News) – Gold prices started the week by reaching another milestone, as spot prices reached $2,100 per ounce, indicating that the global demand for gold is expected to continue.

On Sunday evening in New York, spot gold briefly traded above $2,100, setting a new all-time high. Additionally, gold futures reached a record of $2,152.30 during intraday trading.

Analysts predict that gold prices will continue to rise and reach new highs next year, with the possibility of remaining above $2,000 levels. They attribute this projection to factors such as geopolitical uncertainty, a potentially weaker U.S. dollar, and potential interest rate cuts.

The price of gold has been steadily increasing for the past two months, driven by the Israel-Hamas conflict, which has heightened demand for the haven asset. Furthermore, expectations of interest rate cuts have provided additional support. Gold has historically performed well during periods of economic and geopolitical uncertainty, as it is considered a reliable store of value.

Heng Koon How, head of markets strategy at UOB, predicts that the decline in USD and interest rates in 2024 will positively impact gold prices.

He believes gold could reach $2,200 per ounce by the end of that year. Similarly, Nicky Shiels, head of metals strategy at MKS PAMP, shares a bullish outlook on gold, stating that prices could surpass $2,100 and potentially reach $2,200 per ounce due to reduced leverage compared to 2011.

Not everything that shines is made of gold.

On Friday, the price of gold settled just below $2,100, reaching a record high after a 4% increase the previous week. However, when trading resumed on Sunday evening, both spot and futures prices briefly surpassed that level before experiencing a 2% dip on Monday.

Bart Melek, the head of commodity strategies at TD Securities, predicts that gold prices will average $2,100 per ounce in the second quarter of 2024. He believes that strong central bank purchases will serve as a significant catalyst in driving up prices.

A recent survey conducted by the World Gold Council reveals that 24% of central banks plan to increase their gold reserves within the next 12 months. This shift in sentiment is due to growing pessimism about the U.S. dollar as a reserve asset.

Melek states that this indicates a potential rise in demand from the official sector in the coming years. Additionally, he suggests that a policy pivot by the Federal Reserve in 2024 could further impact gold prices. Lower interest rates typically lead to a weaker dollar, making gold more affordable for international buyers and subsequently increasing demand.

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