Gold Price Flies Past $2,100 to New Record

Gold prices hit a fresh record on Monday for a second day in a row — with spot prices hitting $2,100 as the global rush for gold continues.

Gold prices are on track to hit new highs next year and could stay above $2,000 levels. Economists cite geopolitical uncertainty, a possibly weaker U.S. dollar, and likely interest-rate cuts as the reasons behind this projection.

Prices of gold have shot up for two consecutive months with the Israel-Palestinian conflict lifting demand for the safe-haven asset. Gold performs well during periods of economic and geopolitical uncertainty due to its status as a reliable store of value.

Analysts expect gold prices to average $2,100 in the second quarter of 2024, with strong central bank purchases acting as a key driver in boosting prices.

According to a recent survey by the World Gold Council, 24% of all central banks plan to bolster their gold reserves in the next 12 months, as they become more pessimistic about the U.S. dollar as a reserve asset. This trend signals potentially higher demand from the official sector for the foreseeable future.

In addition, a possible policy pivot by the Fed in 2024 could also be on the cards. Lower interest rates, if they materialize, will weaken the dollar. A softer dollar makes gold cheaper for international buyers, thus driving up demand.