Gold ($GC=F) is the most popular precious metal amongst investors, who view it as a means of diversifying risk, especially via derivatives and futures contracts.
On Friday, April 12, Gold prices hit a new-year record high of $2,400 as demand continued to rise amidst rising geopolitical sessions, marking the 17th record high of the year.
Gold futures for delivery in June surged by $44, or 1.8%, reaching $2,417 per ounce, hovering near its peak for the day. Thursday saw the 16th occasion of a record closing in 2024, as the precious metal climbed by $24.30, or 1%, to end at $2,372.70 per ounce on Comex.
Chinese demand for gold, geopolitical crises, and Federal Reserve cuts are some of the drivers of the rally.
Chinese Demand Pushes Prices Higher
Gold has gotten bullish momentum from China, as demand rose in March. The Chinese are increasingly turning to the precious metal to reduce their dependence on US dollars. During an interview with IG TV, John Meyer of SP Angel said that Russia is also a major buyer, but its numbers are lower than those of the Chinese.
The discussion also delved into the price of copper, another aspect of China’s story, according to Meyer, who suggests that the Chinese government views copper as a similar safe haven to gold.
Furthermore, physical gold premiums rose this week in China as demand to shore up the yuan depreciation rises, with dealers in China charging premiums of $30-$50 per ounce. in India, record prices have forced dealers to offer discounts for the sixth week in a row.
President of world markets at EverBank, Chris Ghaffney, said, “The positive factors for gold outweigh the negative. The heightened tensions in the Middle East is the main driver for gold’s recent surge.”
Gold Rises Amidst Record High-Interest Rates
Interest rates at the European Central Bank are at a record high. However, they could be reduced in June 2024. The increased interest rates lower the attractiveness of holding gold, which does not yield interest.
Despite this, Gold prices continue to soar amid concerns of a conflict in the Middle East between Israel and Iran. While the United States anticipates that Iran will attack Israel in the upcoming days, it does not believe it will turn into war, said a U.S. official.
In a note, Ole Hansen of Saxo Bank said, “Gold continues to go from strength to strength as we are witnessing fear of missing out on clear display.”
He added, “Fear of missing an ongoing rally creates a strong buy-on-dip mentality, in the process reducing the risk of recently established longs being challenged.”
Gold Price Trend
Gold $GC=F is trading at $2,405 per ounce on Friday, April 12, with a gain of 2.08% from its previous high of 2,354.80 per ounce on April 11.
Analysts have forecast $2,600 per ounce for Gold in the coming weeks. The price of $GC=F is in strong bullish momentum, and it could rise amidst geopolitical crises and demand for Gold in China.
Should You Hold Gold in Your Portfolio?
Gold has hit another record high of the year amid rising demand for the safe-haven precious metal. Increasing Chinese demand and fears of a looming Middle East conflict are the main drivers of this rally. Although investing in gold comes with many risks, keeping an eye on the latest federate cuts and geopolitical tensions is essential. Gold could be a lucrative investment for investors with long-term horizons.
Click Here for Updates on Gold – It’s 100% FREE to Sign Up for Text Message Notifications!
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.
