Key Points
- Gold has hit another new record high, trading above $4,220 an ounce.
- The rally is driven by a “flight-to-safety” as investors worry about the economy and geopolitical tensions.
- Other precious metals like silver, platinum, and palladium have also seen massive gains.
- A weaker U.S. dollar and expected Fed rate cuts are also fueling the rally. Some Wall Street analysts believe gold prices could go even higher.
Gold has once again smashed through its all-time high, with the spot price soaring past $4,220 an ounce on Wednesday. The precious metal is in the middle of a historic rally as nervous investors look for a safe place to park their money amid a perfect storm of economic and geopolitical fears.
The “flight-to-safety” trade is back in a big way. Gold first broke the $4,000 barrier in early October, and it has only continued to climb. The rally has been fueled by a long list of worries: a shaky global economy, ongoing trade tensions, and uncertainty about U.S. government policy. A weaker U.S. dollar and the expectation of more interest rate cuts from the Federal Reserve have also added fuel to the fire.
And it’s not just gold. The rising tide has lifted all precious metals. Silver recently crossed the $50 an ounce mark for the first time in decades, and both platinum and palladium have seen huge gains of over 75% this year.
Wall Street analysts believe there’s still more room for prices to run. JPMorgan has suggested that if foreign investors moved just a tiny fraction of their U.S. assets into gold, the price could hit $6,000 an ounce.
While some analysts are warning of a potential short-term pullback after such a massive run-up, the long-term trend appears to be firmly in place. “Who sells gold?” asked one commodity expert. “If you hold gold in your portfolio, it acts like a teddy bear in some way — it’s a point of comfort.”
