The spot price of gold hit highs of about 2,365 US dollars (£1,864) per ounce on Tuesday morning, surpassing previous record highs touched earlier this month
Gold prices have soared to a record-breaking high as the precious metal continues to be the go-to “safe haven” for investors amid global uncertainty.
On Tuesday morning, the spot price of gold surged to approximately 2,365 US dollars (£1,864) per ounce, eclipsing the previous highs set earlier in the month. Since the beginning of the year, gold’s value has leapt by around 13%.
The surge is attributed to escalating geopolitical tensions, persistent economic unpredictability, and recent stock market turbulence. This uptick also mirrors robust demand from central banks, particularly in China, Poland, and Singapore, as well as from Asian investors who have been snapping up gold, UBS investment specialists report.
UBS has observed that gold’s ascent has been “faster and more forcefully” than anticipated, with predictions of continued strong purchasing activity. Fidelity International’s associate director Ed Monk commented that the skyrocketing gold prices are bolstered by the prospect of falling interest rates, geopolitical worries, and increasing wariness towards equities.
Lower interest rates often drive investors and savers to seek out more lucrative opportunities, such as precious metals. Mr Monk said: “In general, it (gold) performs well in times of political or economic uncertainty that cause investors to seek safe-haven assets”.
“In addition, events causing a drop in the buying power of paper assets quantitative easing or excessive inflation drive up the underlying value of gold and tend to do the same to its price.”
Due to its limited supply, an increase in gold demand leads to a surge in its price. Mr Monk further explains that gold, seen as a “safe-haven option” by investors, sees its demand increase with escalating conflicts, such as those happening in the Middle East and the Russian war in Ukraine.
Tuesday’s top FTSE 100 gainer was gold miner Fresnillo, which saw its gains exceed 4% amid the rise in gold prices.
