March 22, 2024: gold price rises with a surprise jump yesterday, touching $2,225 per ounce, the highest level in its history. This sudden rise was supported by a decline in the dollar and bond yields after the Federal Reserve (the US central bank) maintained its expectations for three interest rate cuts this year.
why does gold price rises?
- Dollar Weakness: The decline in the value of the dollar made gold cheaper for buyers holding other currencies, increasing demand for the yellow metal.
- Low Bond Yields: Low bond yields make gold a more attractive investment vehicle, as it does not generate returns like bonds.
- Expectations of Lower Interest Rates: Investors expect the US central bank to cut interest rates, making gold more attractive as an investment.
- Inflation Concerns: Investors are increasingly concerned about rising inflation, prompting them to buy gold as a hedge against currency devaluation.
Impacts of Rising Gold:
- Increased Demand for Jewelry: Rising gold prices could lead to increased demand for jewelry made from the yellow metal.
- Higher Production Costs: Rising gold prices could lead to higher production costs for goods that use gold in their manufacturing.
- Increased Investment in Gold: Rising gold prices could prompt more investors to buy the yellow metal as an investment.
Future Outlook:
Gold prices are expected to continue rising in the coming period, supported by the factors mentioned above.
source: lualuatv
