Gold prices are hitting record highs, topping $2,100 per ounce on Monday as investors boost their holdings of the shiny metal amid as a hedge against global conflicts and expected rate cuts from the Federal Reserve.
The recent price surge in gold is “wild,” although it follows two years of solid gains in gold prices, noted Peter Boockvar, chief investment officer at Bleakley Financial Group in a report. (Adjusted for inflation, gold reached its peak in 1980, when its price of $850 would translate into $3,200 in today’s dollars, he noted.)
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According to Reuters, the spot price for gold touched rose as high as $2,111.39 in overseas trading on Monday. It dipped to $2,071 later in the session, up 14% for year. By comparison, the S&P 500 has increased 21% over the same period.
Why gold is rising
Investors are snapping up gold because it is viewed as an inflation hedge and a safe haven in times of political instability, concerns of which have been sparked by Russia’s war in Ukraine and the Israel-Hamas conflict. Non-U.S. investors, especially people in China, India, Indonesia and Saudi Arabia, are also more likely to buy physical gold as part of their financial diversification, noted Louis Gave of Gavekal research.
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