The price of gold hits a new record
The price of gold reached a new record at the start of Asian trading on Tuesday, hitting $3,501.59 per ounce, surpassing its previous record of $3,500.10 per ounce set in April.
Investors are turning to the yellow metal as a safe haven instead of the dollar due to increasing chances that the U.S. Federal Reserve will cut interest rates in September, as well as concerns over the institution’s independence.
The U.S. judiciary has yet to decide on the fate of Lisa Cook, a member of the Federal Reserve’s Board of Governors, whom President Donald Trump ordered to be dismissed in a move that threatens the independence of the institution, which the Republican president has called on to lower interest rates.
In light of the struggling U.S. economy, investors expect the Federal Reserve to reduce interest rates by 0.25 percentage points at its upcoming meeting on September 16-17.
A reduction in interest rates weakens the dollar and the returns on bonds, which, like gold, are considered safe havens. Thus, investors are shifting towards the precious metal in such scenarios.
Since the beginning of the year, the price of the yellow metal has risen by about a third, driven by geopolitical uncertainty, represented by the ongoing wars in Ukraine and Gaza, as well as the trade war being waged by President Trump.
