The price of gold has hit a new record of more than $2,700 an ounce overnight with some experts predicting it could top an all-time high of $3,000 before Christmas.
Gold has surged in price by 40 percent in the past year and an increasing number of people are diverting at least some of their available investment cash into the precious metal.
The increase comes as investors around the globe seek out a safe haven for their wealth against a background of uncertainty caused by tensions in the Middle East, the Ukraine war and the presidential election in the USA.
The situation has seen a surge in the number of people buying gold coins from the Royal Mint, where any gains are free of capital gains tax (CGT).
The fact that central banks around the world are set to cut interest rates in the coming months means investors are looking towards gold and silver as offering stronger returns than simply leaving cash in savings accounts.
Soni Kumari, a commodity strategist at ANZ, said: “This month’s rally is more driven by safe-haven demand because of geopolitical tension in the Middle East and uncertainty around the US election because its outcome is looking very tight, anyone can win.”
A number of analysts warn there could be a small price correction with a short-term fall in the coming weeks, before further increases ahead of Christmas and into the New Year.
Wes Wilkes, CEO at Net-Worth NTWRK, said: “After a significant 13 year consolidation period the breakout in gold is set to push higher.
“With the current trend alongside the upcoming US election uncertainty and ongoing geopolitical tensions, we can expect the $3,000 gold level to be breached with a high degree of certainty and it could even happen before we close the door on 2024.”
Prem Raja, Head of Trading Floor at Currencies 4 You, told Newspage: “The strength in precious metals and gold in particular this year has been phenomenal, with factors such as lower interest rates, the U.S election and the current Middle East tensions seeing gold prices reach new highs of $2700.
“I personally believe gold is still on an upward trend and $3000 per ounce is now a real possibility. In the short term I do think a small correction is due, this is something we will probably see from November into December, and then it will be worth bidding again going into 2025. It’s still a bull market for precious metals and pullbacks are healthy.”
Anita Wright, Independent Financial Adviser at Bolton James Ltd, staid: “Although gold has reached a new all-time high, the real action in gold prices hasn’t started yet, and there is still much upside potential.
“Many key drivers that historically push gold prices higher are not yet fully in play. For instance, real interest rates remain positive, and the USdollar has retained some strength.
“Interest rate cuts have only just begun, and we have not yet seen the significant negative real yields that often fuel gold’s rise. In addition, geopolitical factors, such as sanctions on Russia, are pushing many BRICS countries to reduce their dependency on the dollar, which could lead to dollar weakness in the near future—a key driver for gold. With the fiat currency system under strain and a potential “race to the bottom” for many currencies, gold could continue its upward momentum. It’s possible that gold could reach the $3,000–$3,200 range before seeing another pause.”
Gabriel McKeown, Head of Macroeconomics at Sad Rabbit Investments commented: “As global tensions simmer to a boil, the escalating geopolitical fears have sparked a modern-day gold rush, with investors scrambling for this time-tested safe haven.
“With gold’s siren song growing louder, prices have soared to an all-time high, soaring past the symbolic $2,700 level.
“After the Fed’s rate cut bonanza firing the starting gun on a new easing cycle, gold has continued off to the races, and there appears to be plenty of room to run. Amidst a landscape of international unrest, this might be the catalyst for gold to reach $3,000 soon.
“However, despite the longer-term bull case remaining intact, gold prices may be susceptible to intermittent pullbacks amid such a rapid ascent. With a succession of record highs, the gold market may become overheated and vulnerable to profit-taking, so investors should prepare for short-term volatility as bullion prices reach for the stars. In a world fraught with uncertainty, savvy investors are driving the precious metal to record levels.”
