For the first time in history, the spot price of gold exceeded the level of 4,000 dollars per ounce. The rise has been attributed to concerns about US economic stability, a government funding crisis in Washington and heightened geopolitical tensions. reports Bloomberg.
The price rose 1.1% to $4,026.69 an ounce, while trading in Singapore was at $4,025.86. This was a landmark event for the bullion market: just two years ago, their value was less than $2,000, and now the return on gold has exceeded the return on stocks in the 21st century. The value of the precious metal has increased by more than 50% since the beginning of the year amid uncertainty in global trade, doubts about the independence of the Federal Reserve System and the fiscal stability of the United States.
Geopolitical tensions also contributed to the rise in prices, which increased demand for so-called “haven assets,” while central banks actively increased gold purchases. This became especially relevant after the financial crisis in Washington. In addition, the beginning of the Fed’s monetary easing cycle had a positive effect on the growth of the value of gold, which, unlike other assets, does not earn interest.
Investors are actively investing in exchange-traded funds: in September, ETFs backed by gold bars recorded the largest monthly inflow in more than three years.
“Breaking the $4,000 mark with gold – it’s not just fear, it’s a redistribution of funds”, said Saxo Capital Markets Pte strategist Charu Chanana.
Amid the pause and rate cuts, he said, real yields are falling, while AI stocks appear overvalued.
