The price of gold reached an unprecedented peak, hitting $2,335 per troy ounce (31.1 grams) due to the weakening dollar. However, later in the day, it dipped below the $2,100 mark. This still broke the previous record set in August 2020 at $2,075, driven partly by uncertainties surrounding the coronavirus.
Gold prices have been on the rise for weeks, particularly in response to a weakening dollar. The anticipation of a potential interest rate cut by the US central bank in the spring has contributed to the dollar’s decline in value. Federal Reserve Chairman Jerome Powell has mentioned that it’s premature to assume an interest rate cut.
A weaker dollar makes gold more affordable for traders using other currencies, leading to increased demand and a subsequent rise in prices. Ongoing geopolitical unrest, such as the conflict between Israel and Hamas, has also contributed to gold’s upward trajectory this year, as investors seek safe-haven investments.
This week, an important U.S. job report is expected to be released on Friday, playing a significant role in shaping the Federal Reserve’s interest rate policy.
