Gold Prices Reach New Heights Amid Rising Demand for Silver

The upward trajectory of gold prices continues, propelled by various economic factors, including the ongoing conflict in Ukraine, shifts in U.S. interest rates, and a growing lack of confidence in government bonds. As of today, gold has reached an unprecedented price of $3,759.23 per ounce in London, a record that highlights the metal's increasing value. In euro terms, gold has also hit a new high at EUR3,185.10 per ounce.

In addition to gold, silver is experiencing a surge in demand, with its price climbing to $44.11 per ounce, the highest level seen in 14 years. Since the beginning of the year, silver's value has increased by over 50%, while gold has appreciated by more than 40% during the same period.

A key driver of these price increases is the expectation of further interest rate cuts by the U.S. Federal Reserve, which recently lowered its benchmark interest rate for the first time this year. Analysts suggest that two additional rate cuts, each by 0.25 percentage points, are anticipated before the year ends. Since precious metals do not yield interest, a decline in rates for other investments, such as government bonds, tends to boost their appeal among investors.

The gold market is also being supported by a weakening U.S. dollar, which has lost value in recent weeks due to expectations of lower interest rates. Since gold is primarily traded in dollars on the global market, a decline in the value of the U.S. currency makes gold more affordable for international buyers, thereby increasing its demand and supporting higher prices.

Market analysts believe that gold will continue to be regarded as a safe haven for investors. According to a recent analysis, the current economic climate is drawing investment capital towards gold, which was previously allocated to German bunds or U.S. Treasury bonds during periods of uncertainty.

Over the past three years, the price of gold has more than doubled, largely driven by geopolitical tensions, including the ongoing war in Ukraine, which has heightened the allure of gold as a relatively secure investment option. Additionally, the aggressive trade policies of the U.S. government, along with concerns regarding the Federal Reserve's independence voiced by former President Donald Trump, have further intensified investor anxiety.