Gold xauusd prices have crossed the $2,500 per ounce mark to $2,531, hitting an all-time high. The move may be driven by rising hopes of a rate cut by the US Federal Reserve. Investors are looking to make more money by investing in gold. Gold Security– The focus on Bitcoin and other cryptocurrencies has led to a decline – due to fears of an economic recession.
Variables affecting the rise of gold
The rise in gold prices can be largely explained by several factors combined. The expectation of lower interest rates helped push down the US dollar, which also led to lower oil prices. Increases the attractiveness of gold For foreign investors, holding non-yielding assets such as gold reduces the opportunity cost when the dollar falls, leading to more buying activity.
This situation has prompted most experts to call, in line with many other market watchers, for a possible 25 basis point interest rate cut by the Federal Reserve at its September conference.
Beyond the monetary policy perspective and geopolitical concerns, particularly in the Middle East, demand for gold as a safe haven has been on the rise. Gold has become more attractive as investors seek cover from ongoing conflict and economic turmoil. This has been evident in the significant increase in holdings of gold-backed exchange-traded funds (ETFs) to a seven-month high.
Gold outperforms Bitcoin
Bitcoin Investors can’t afford to hold on to anything while gold prices are soaring. Increasing regulatory hurdles and increased scrutiny have weighed on the Bitcoin market, dampening investor enthusiasm. Conversely, gold appears to be one of the reasons it has performed so well recently, because it is a digital currency. A classic refuge in times of uncertainty. And brings more money.
Compared to gold, which has been hailed as a store of value, bitcoin has not performed as well as the traditional metal in recent times. The cryptocurrency has fallen 16% from its all-time high of $73,740 in March.
While Bitcoin offers significant returns, most investors today are driven by stability and security – something gold has in abundance. In this context, the various performances highlight a clear shift in investor sentiment, especially now that the economy remains volatile.
Image: DALL-E
Future signals
Market watchers have already started looking for Signals from the Federal Reserve While gold prices are rising, the biggest demand will be on any future monetary policy directions, which will be of great interest to Fed Chairman Jerome Powell at the Jackson Hole Symposium.
Investment institutions such as UBS are already stating that if trends continue, gold could reach $2,600 per ounce by the end of 2024. Low interest rates and geopolitical concerns that will not go away will certainly maintain demand for gold and position it as a store of value.
Current gold bullishness above $2500 per ounce Gold represents a historic turning point in investment appeal. With rising geopolitical tensions and interest rate expectations, gold has remained the go-to choice for those looking for a safe investment.
While the outlook for gold remains bright, especially with additional guidance from the Federal Reserve, the same is not the case for Bitcoin. This development reinforces the idea that gold is always a viable and stable investment front in times of turmoil.
Featured image by Pexels, chart by TradingView
Comments are closed, but trackbacks and pingbacks are open.