Summary
- The article reported that gold prices broke $3,000 for the first time in history due to preference for safe-haven assets.
- It stated that the trade war amplifying market uncertainty and expectations of interest rate cuts by the Federal Reserve led to the rise in gold prices.
- The article mentioned that while Wall Street forecasts further increases in gold prices, some are also advocating caution.
Safe-haven Asset Preference Amid Trade War
Gold prices have surpassed $3,000 per troy ounce for the first time in history. This surge is the result of increased demand for safe-haven assets as market uncertainty grows due to the widespread trade war triggered by U.S. President Donald Trump.
On the 13th (local time), gold futures on the New York Mercantile Exchange (COMEX) rose by 0.59% at one point during the session, reaching $3,005.9 per troy ounce compared to the previous trading day. Gold prices have increased by 14% this year and over 38% compared to last year. Investors' preference for safe-haven assets to avoid trade war shocks has pushed gold prices higher. Expectations for interest rate cuts by the Federal Reserve (Fed) were also reflected. Consumer prices last month fell below market expectations, increasing hopes for an early rate cut.
While many on Wall Street forecast that the 'gold rally' will continue this year, some voices urge caution. Macquarie Bank predicted that gold prices could rise to $3,500 per troy ounce by the third quarter of this year, while BNP Paribas forecasted $3,100 per troy ounce by the second quarter. In contrast, investment advisory firm Gavekal Research warned that gold prices could potentially be cut in half considering historical averages.
Kim In-yeop Reporter inside@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
