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Affected by the prospect of US interest rate cuts and global geopolitical risks, the price of gold, which is regarded as a safe asset, hit an all-time high on Friday (16th), breaking through $2,500 per ounce.
At around 4 p.m. in Lisbon, gold was up 1.24% at $2,487.50 an ounce, having earlier hit an all-time peak of $2,500.16. The previous record dates back to mid-July.
Gold prices were boosted by data showing subdued activity in the U.S. new homebuilding sector in July, a new negative signal for the country’s economy.
Markets have reinforced expectations for a rate cut by the US central bank, the Federal Reserve, amid concerns the world’s largest economy is sliding into recession.
City Index analyst Fawad Razaqzada explained, “The sharp fall in bond yields and the dollar amid expectations of a rate cut by the Federal Reserve has benefited zero-yielding or low-yielding assets such as gold.”
In addition, Commerzbank analyst Carsten Fritsch stressed that gold “continues to be sought after as a ‘safe haven asset’ against a backdrop of tense geopolitics.”
The international community has stepped up diplomatic efforts to reach a ceasefire in the Gaza Strip after ten months of war between Israel and the Islamist movement Hamas in the Middle East.
The talks also aim to avoid regional conflict following threats from Iran against Israel, which has vowed to avenge the killing of Hamas political leader Ismail Haniyeh in an Israeli strike in Tehran on July 31.
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