Analysts explain the reasons for global gold prices soaring to unprecedented levels

Global gold prices soared again to unprecedented levels at the end of the last sessions of last week, with the increase in demand for safe-haven assets in light of renewed geopolitical tensions, amid expectations that the Reserve will end the monetary tightening cycle next month.

The weekly prices of gold futures for December delivery rose by 2.6% to reach $2,537.80 per ounce, the fourth record level in August.

The yellow metal prices increased on the weekly level after being reinforced by its daily gains, as it recorded an increase at the end of trading last Friday by 1.8% or $45.4.

Nour El Din Mohamed, Chairman of Target Investment Company, explained to (Mal) that the continued rise in global gold prices to unprecedented levels and exceeding the level of $2,500 per ounce, which is its highest level ever at the end of last week, is due to several main reasons, most notably the changes revealed by the economic data on unemployment and inflation in the US economy for the past month, which were very conflicting, especially the employment figures. The President explained that this economic data may encourage the Federal Reserve to reduce interest rates at a faster pace than expected, which is in the interest of the upward trend of gold as a financial asset that does not give interest, and thus the cost of holding it is reduced. He pointed out that among these reasons are the geopolitical unrest in the Middle East and the troubled relations between Israel and its neighbors, which have extended outside the region and the great danger this represents to the entire world in the event of a war, which also serves the upward trend of gold, which is considered a safe haven. He pointed out that among these reasons is also the looming real estate crisis in China, which comes to us every now and then and causes additional risks for investors, as there are about 48 million unfinished homes that threaten a real estate disaster in China, according to the latest official statistics.

He explained that among these reasons is also the decline in the dollar price against major currencies and the decline in interest rates on US bonds, which makes gold a suitable alternative to these investment tools.

For his part, Amr Abdo, President of the American Trader Academy, confirmed that the record rise in global gold prices confirms expectations that it is qualified to achieve new record levels before the end of this year in light of the continued geopolitical tensions and economic uncertainty.

For his part, Ali Hamoudi, CEO and Head of Investment at “ATA Global Horizons”, explained that gold was able to maintain its gains despite the improvement in US data and the decline in expectations of interest rate cuts, because the Federal Reserve is on its way to reducing interest rates in one way or another, which is a positive thing for gold because it reduces the opportunity cost of the precious metal. He expected gold to continue its rise amid concerns about the continued increase in geopolitical tensions in the Middle East, which prompted investors to buy gold before the start of last weekend in anticipation of any developments in this regard.