Gold fetches record price as central banks stockpile ahead of expected interest-rate cut
- Citigroup says the metal could be headed for US$3,000 per ounce next year after hitting US$2,531.75 overnight
A rush for gold shows no signs of letting up, as the price of the bullion hit an all-time high overnight on bets that the Federal Reserve is set to deliver its first interest-rate cut in four years, leading global central banks to amass more of the precious metal to diversify their assets.
The spot price touched a record of US$2,531.75 per ounce overnight, marking a 22 per cent gain this year, and traded at about US$2,510 an ounce on Wednesday. UBS Global Wealth Management expects the metal to approach US$2,700 by the middle of 2025, while Citigroup is even more optimistic, forecasting a rise to US$3,000 in the same time frame.
Gold’s ascent comes in the run-up to the Jackson Hole Symposium on Friday, during which Fed chair Jerome Powell is expected to give clues about anticipated policy easing.
Amid cooling inflation, a cut during the Fed’s September 18 meeting now seems like a certainty, with the market pricing in more than a 25-basis-point reduction, according to the CME Group.
An environment with low borrowing costs burnishes the appeal of gold, which generates no rate-bearing returns.
