Precious metal: gold price increases to record – investors rely on interest rate reduction

The gold price has reached the third trading day in a row. The largest price driver remains the prospect of falling interest rates in the USA, with investors even increasing for a large interest rate reduction by the US Federal Reserve Fed by 0.50 percentage points.

In the morning, the price for a troy ounce (about 31.1 grams) on the stock exchange in London rose to $ 3,659.36 and thus more than ever. The list also reached a record high at EUR 3,107 in euros.

Immense value growth since the beginning of the year

The gold price has been on highs since the beginning of the month. Since the beginning of the year, the increase in value has been added to around 40 percent. The escape of investors in secure investment ports has caused a stronger demand for the precious metal. The reasons are geopolitical risks from the Russian attack war against Ukraine, the aggressive customs policy of the US government as well as continued gold purchases by countries such as India and China as well as the prospect of an interest reduction in the USA.

The speculation on falling US interest rates started after Fed boss Jerome Powell had made his willingness to relax in monetary policy in August at the next interest decision next week.

Courses around $ 5,000 per ounce possible?

The weakness of the dollar, which followed the increased speculation on falling interest rates, also caused a buoyancy during the gold price. Since gold is mostly traded in US dollars on the world market, a weak dollar makes the precious metal outside the dollar space cheaper, which increases demand.

Most recently, the Goldman Sachs investment bank even wrote that the gold price could increase much higher – except for almost $ 5,000, the ounce. However, this is only to be expected if the independence of the US Federal Reserve Fed is affected by the attacks by US President Donald Trump and investors play part of their stocks of government bonds in gold.