The Rise and Fall of Gold Price Today: Factors and Forecasts

Gold Surges to Record High Amid Strong Demand

On Friday, April 21, 2024, gold surged to an unprecedented peak, surpassing $2,410 per ounce. Robust demand for secure investments, fueled by concerns about inflation, geopolitical uncertainties, and market volatilities, drove this surge. Despite concerns over potential Fed rate cut delays, which could weaken gold’s appeal as a non-interest-bearing asset, the metal remained attractive.

Temporary Dip Amid Continued Optimism

Later in the day, gold saw a slight decline but remained notably elevated from previous closings. At 20:00 GMT on Friday, the spot price stood at $2,343.00 per ounce, showing a minor $32.00 or 1.37% drop from the prior close. However, this dip was insignificant compared to the weekly surge of about 3.4%, highlighting gold’s enduring value.

Investor sentiment stays bullish, with expectations of further appreciation in gold’s value. Analysts anticipate that gold could potentially reach $2,500 or even $3,000 per ounce by the end of the year. Various factors, such as low interest rates, fiscal stimulus, and vaccine distribution, support this forecast. Market analysts expect these elements to sustain or enhance the demand for gold as a safe asset and store of wealth.

Nevertheless, gold faces downside risks, including a strengthening US dollar, rapid economic recovery, and potential Fed monetary support reductions. These factors could dampen gold demand, leading to a correction. A stronger US dollar may inflate gold prices for foreign buyers. An economic rebound might lessen the need for safe assets, favoring riskier investments. Additionally, any Fed monetary stimulus scaling back could increase the cost of holding gold, potentially reducing its appeal as an inflation hedge.

Source :
(1) Gold – Price – Chart – Historical Data – News – TRADING ECONOMICS.
(2) Live Gold Price Chart.
(3) Gold Price: Current Pricing, Prices Chart & Rate Graph – DailyFX.
(4) Gold (XAU/USD) News and Analysis – DailyFX.