GOLD prices shot up to an all-time high yesterday, as investors flock to the traditional safe haven asset amid conflict in Gaza and expectations US interest rates will drop.
The price of the precious metal hit $2,111 an ounce, far above the previous high of $2,075 seen during Covid lockdowns when people were looking for more ways to safeguard their money.
Gold — traded since ancient Egyptian times — is still critical to the flow of money markets because it carries no credit risk and its rarity means it preserves its value over time.
Its prices are up by about 13.5 per cent this year, gaining five per cent in the past month alone.
Here, Sun Business explains why they have increased — and why it matters:
US interest rates: Traders have become more confident that the US central bank — and its global rivals — will lower interest rates as inflation eases. If they do fall, investors will look for better returns than government bonds offer. This makes other assets, like gold, more attractive.
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