Gold prices have been on the rise, with experts predicting that a record high is within reach [b893a445]. Factors such as the price of oil, central bank purchases, foreign exchange market developments, and bond market movements all play a role in the increase of gold prices [b893a445]. The World Gold Council highlights the strong purchases by central banks, with demand reaching a record high [b893a445]. The strength of the US dollar also influences the price of gold, and recent easing of pressure from the foreign exchange market has benefited gold [b893a445]. Market experts expect economic growth to weaken in the fourth quarter, which could lead to stable or slightly declining interest rates, making gold more attractive [b893a445]. From a chart perspective, gold still has room for improvement and breaking the $2,000 mark is a possibility [b893a445]. If gold reaches $2,300, it would break its record high [b893a445]. However, when adjusted for inflation, gold is still below its 1980 high [b893a445]. The future prospects for gold remain uncertain [b893a445].
CEO of Newmont, the world's largest precious metals mining company, predicts that the price of gold may reach a record high due to ongoing wars [d8650c25]. The recent conflict between Israel and Hamas has already caused a 10% increase in gold prices [d8650c25]. Other factors contributing to the rise include the nearing end of the U.S. Federal Reserve's interest rate hike and increased gold purchases by the U.S. central bank [d8650c25]. China's high consumption of gold luxury goods is also driving up prices [d8650c25]. The all-time high for gold prices was reached in August 2020 during the COVID-19 pandemic [d8650c25].
The price of gold is influenced by economic instability, inflation, and interest rates. Gold prices tend to rise during periods of economic turmoil. The spot price of gold increased by 271% from 1978 to 1980 and by 119% from 2008 to 2011. The fear of a global economic downturn in 2018 led to a 66% increase in gold prices. The results of U.S. presidential elections can also impact gold prices. Democratic victories have historically led to a 0.5% increase in gold prices, while Republican victories have resulted in a 1.1% decrease. The effect is amplified when examining the period between election and inauguration days, with Democratic wins leading to a 1.5% increase and Republican wins causing a 5.5% decrease. This may be due to gold buyers associating Republican presidents with lower inflation and a stronger dollar, while perceiving progressive fiscal policies as leading to higher inflation. Researchers have calculated the changes in gold prices following election day, between election and inauguration day, and over a four-year period [029aee9e] [30283c6f].