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Peter Davis

An writer at FOMOdrive

  • Dec 04, 2023
  • 2 min read

Gold sets a new all-time high above $2,130 an ounce

On Monday, gold prices experienced a sharp increase at the start of trading.

Quotes surged past the previous record of approximately $2,080, increasing by over $50 in a quarter of an hour.

On Friday, gold prices surged following a speech by Federal Reserve Chairman Jerome Powell, in which he stated that the key rate was in a restrictive state, thus indicating that a tight monetary policy is having a negative effect on economic activity and inflation.

Powell stated that, as the FOMC has progressed to this point, the risks of either not tightening enough or tightening too much have become more equalized, so they are proceeding with caution.

The futures market is now estimating a 71% chance that the Federal Reserve will reduce rates in March 2024, following the Fed chairman's speech which raised expectations of such an event.

Crescat Capital has stated that within a period of three to six months, gold could potentially reach a price of $2,500 per ounce. This is due to the fact that there is an unprecedented amount of macroeconomic reasons to own this metal. Central banks have been actively purchasing gold, and it is expected that hedge funds will follow suit.

It is predicted by UBS and Morgan Stanley that a recession will occur in the United States in 2024, and that interest rates will decrease during the first half of the year. The Federal Reserve will be required to make considerable rate reductions, potentially as soon as the beginning of 2024, which will be accompanied by a much more vigorous money printing.

Jim Rogers, a renowned investor, has expressed his opinion that gold and silver will be more profitable than other investments during a period of high inflation and worries of an economic downturn.

IG Wealth Management predicts that gold may increase in value to $2,400, as it is currently undervalued by 20%.

The current record gold prices are only nominal; when adjusted for inflation, the 1980 peak price of gold would be equivalent to about $7,760 an ounce today.

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