Benzinga - by Zaheer Anwari, Benzinga Contributor.
- Gold's price has surpassed $2,150 per ounce, driven by a weakening U.S. dollar and reinforcing its status as a safe-haven asset.
- The declining U.S. dollar makes gold more attractive to holders of other currencies, increasing demand and value.
- Gold's price surged marks a 6% rise in 2024 year-to-date.
A declining dollar creates a favorable environment for holders of other currencies to invest in gold, driving up demand and, consequentially, its value.
Another vital aspect of the equation involves the drop in U.S. Treasury yields. When government bond yields decrease, assets like gold become more appealing to investors. The Federal Reserve's monetary policy speculations have also played a significant role.
The possibility of the Fed cutting borrowing costs sooner than anticipated has sparked a gold price surge. However, the sustainability of this upward trend in gold prices heavily relies on the upcoming U.S. non-farm payrolls report.
This report could either strengthen or weaken the argument for the Fed's current monetary position. A strong jobs report might reinforce the Fed's assertive strategy, potentially curbing the gold trend. Conversely, if job growth numbers disappoint, it could raise hopes for early rate reductions, further boosting gold prices.
Gold prices soared past the previous all-time high of $2075 on December 4th, but the spike was short-lived. The price of the commodity then fluctuated between $1614 and $2075 until March 1st, when a sudden surge of over 2% in one day propelled gold above $2028, breaking the resistance zone.
Gold has seen a 6% rise for 2024 so far. The big question on investors' and analysts' minds is whether this current breakout signals a longer-lasting bullish trend or a fake breakout.
After the closing bell on Thursday, March 7, the commodity closed at $2159.72, trading up by 0.59%.
This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.