Gold hits a historical high for the 28th time this year! The central bank remains the main buyer of gold
Spot gold broke through the $2500 mark overnight, with a cumulative increase of 21% so far this year. Analysis suggests that the continued demand for gold from central banks around the world is expected to drive the price of gold up to $2900
Geopolitical tensions, combined with rising rate cut expectations, and global central banks' continuous "buying spree", have once again pushed the gold price to a new all-time high!
On Friday, the most active December gold futures contracts GC00 and GCZ24 on the COMEX futures trading climbed to a historical high of $2538.70 per ounce and closed at a record high of $2537.80, up 2.16% for the day. This marks the 28th settlement price record high for gold futures this year.
Spot gold closed up 2.09% on Friday to a historic high, breaking through the $2500 mark for the first time, with a weekly gain of over 3% and a three-week winning streak.
Torsten Slok, Chief Economist at Apollo Global Management, attributed the rise in gold prices mainly to the gold-buying frenzy by central banks around the world. He believes that due to concerns about the U.S. fiscal situation, central banks may be diversifying their purchases of U.S. debt.
Adrian Ash, Research Director at BullionVault, stated this week: "Over the past 5 years, demand for gold by central banks has surged. Official data shows that nearly 1 ounce out of every 10 ounces of gold produced by the mining industry has been taken into central bank reserves."
Ash mentioned that since the summer of 2004, the total weight of gold reserves held by central banks worldwide has increased by nearly 19%, with a sevenfold increase in value to $2.4 trillion. Russia, China, India, and Turkey are among the top holders.
Furthermore, expectations of rate cuts by the Federal Reserve and geopolitical tensions have also fueled the sharp rise in gold prices. Gold has accumulated a 21% increase year-to-date.
Analysts believe that due to continued large-scale gold purchases by global central banks and Western investors, there is still room for gold prices to rise.
Ash stated: "Both fundamentally and in terms of broader market sentiment, the continued demand for gold by central banks is becoming increasingly important for the gold bull market."
Alex Kuptsikevich, Senior Market Analyst at FxPro, stated that gold is expected to reach a high of $2800-2900 per ounce. In his report on Friday, he wrote that this is based on the trend of gold from its low in October 2022 to September 2023.
A Senior Market Analyst at Trade Nation suggested that profit-taking may push gold prices down to the range of $2450