The spot gold price reached $2,622 per ounce on Friday, with a rise of 1.7% over the course of the week and more than 1% on Friday alone, according to Deutsche Bank
Gold hit a fresh high, as concerns around inflation and the US economy linger, with bets that the precious metal could touch the $3,000 mark in 2025.
The spot gold price reached $2,622 per ounce on Friday, with a rise of 1.7% over the course of the week and more than 1% on Friday alone, according to Deutsche Bank. The price held steady on Monday, edging slightly higher to $2,623 per ounce, while gold futures reached $2,647.
Deutsche Bank’s analysts said in a note that with the Fed reducing rates by 50 bps, there was a bit more concern about inflation again, pushing gold prices up.
Gold is considered a safe haven investment to hedge against the impact of inflation, as its value typically rises as the pricing power of the currency in which it is priced drops.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: Gold is predominantly traded in US dollars so falls in the currency can make the metal cheaper for buyers, helping increase demand.
The pound continued to strengthen against the dollar on Monday, trading at $1.33 in the afternoon.
Streeter added that inflation remained stubborn in some economies and there are also concerns that governments across the world continue to run up high levels of debt, which is associated with a rise in long-term inflationary expectations.
Central banks have been keeping interest rates higher in an effort to slow down spending and demand enough to lower inflation back down to a widely used target level of 2%. At the same time, rate setters are trying to avoid waiting too long to reduce rates, as this risks slowing activity so much that it tips economies into a downturn.
Meanwhile, Aakash Doshi, head of commodities, North America at Citi Research, said gold could reach $3,000 by mid-2025, as per a Reuters report.
