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.
Current Price of Gold
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, outpacing the benchmark S&P 500’s roughly 20% gain since the start of 2024.
Factors Driving the Increase in Gold Prices
Interest in buying gold often arises during times of uncertainty, such as concerns about inflation and the strength of the U.S. dollar. Gold also surged during the early days of the COVID-19 pandemic.
Geopolitical tensions, recent events like Israel’s strikes in Lebanon, wars in Gaza and Ukraine, and concerns about the health of the U.S. job market have all contributed to the spike in gold prices. Additionally, stimulus measures in China aimed at boosting consumer spending are expected to enhance retail investments in gold.
Investing in Gold: Is It Worth It?
Advocates of investing in gold consider it a “safe haven” due to its potential to diversify and balance investment portfolios, as well as mitigate risks. Some find comfort in owning a tangible asset that can appreciate over time.
While gold can be a valuable addition to an investment portfolio, experts advise against going all-in on the precious metal. It is crucial to have a risk management strategy and not get caught up in the fear of missing out when others are making gains. Future gains in gold prices are not guaranteed, and critics argue that there are more efficient ways to protect capital.
If geopolitical tensions ease, the price of gold may correct slightly, but overall, analysts are optimistic about its performance in the near future. Despite some criticisms, many still view gold as a reliable investment option for uncertain times.
In addition to the factors mentioned in the article, it is essential to consider the impact of global events, such as the COVID-19 pandemic, climate change concerns, and the rise of digital currencies, on the price of gold. These external factors can also influence investor sentiment and drive the demand for traditional safe-haven assets like gold. Keeping an eye on these macroeconomic trends can provide valuable insights into the future performance of the precious metal.
