Gold trades around $4,175 per troy ounce, after hitting a record $5,595 in January. Analysts say central bank buying and safe-haven demand support prices above $4,000, while high interest rates should limit the upside.
Gold is trading around $4,175, but the metal has not delivered the safe haven performance investors expected this year. Demand for such assets is strong as AI jitters hurt tech stocks, the Iran war continues and keeps energy prices elevated, and worries about high government debt persist, Reuters reports.
Gold sold off after the Iran war began
Gold hit record highs at $5,595 per troy ounce in January. It then fell after the Iran war started, as investors tapped the precious metal given losses elsewhere.
Prices rallied again in August as inflation fears returned, along with concern that the Federal Reserve was not doing enough to contain price pressures.
Support above $4,000, limits from rates
Analysts say central bank buying and safe-haven demand support prices above $4,000. High interest rates should limit gold's upside, the report says, but a tense geopolitical backdrop and US fiscal worries should bolster the metal further out.
Julius Baer analyst Carsten Menke sees a longer-term case. According to Reuters: "In the longer term, gold should again benefit from continued strong central-bank buying", he said, adding that renewed concerns over US debt and its rising interest burden would also help.
Source: Investing.com
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