Gold (GC=F) prices are soaring to record highs as investors turn to the precious metal as a safe haven in anticipation of a Federal Reserve interest rate cut in September. Gold currently sits above $2,500 per ounce, meaning a single bar of gold (400 ounces on average) costs $1 million.
Yahoo Finance senior markets reporter Ines Ferré breaks down the details and discusses the factors driving this price surge and inflows into gold ETFs.
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This post was written by Angel Smith
All right. Gold though, touched new all-time highs as investors pour into the precious metal in anticipation of a Fed rate cut. And Nes for a here with the details, Nes.
Yeah, guys, uh Josh, we're seeing the momentum in gold over that anticipation of a likely rate cut in September. And that's really what's driving these prices recently. Uh I was just uh talking to the World Gold Council, their senior market strategist, who was pointing out the inflows from Westerners into gold back ETFs. That has jumped over the past three months. You saw gold uh Westerners from Europe jumping into gold uh back in June. Remember that in June, the ECB lowered its interest rates. And then you saw North America, that those ETFs being uh you're seeing inflows there in July. That's being led by North America with that expectation of the rate cuts here in the US. It's fair to point out that gold does well in a low interest rate environment. It doesn't produce an annual yield, so it becomes more appealing, more attractive in a low rate environment against other investments. Other reasons why we're also seeing gold higher has to do with geopolitical risks and central banks that have been buying up the precious metal. We've also seen the US dollar going down, and that has also lifted gold prices. We're looking at gold futures at about 2,550. If we just take a look at a year-to-date chart, we can see the year-to-date, it's up more than 20%. And I also want to point out what's been happening with the gold miners because this is a year-to-date chart of the gold miners. So a lot of green that we're seeing here. As far as where we go from here, well, UBS is saying that by the end of the year, they're forecasting gold to be at 2600. Goldman Sachs forecast gold for 2700 in 2025. But watch for some pullbacks, some profit taking when you get to these all-time highs, guys.
