Gold futures are now heading for new records, with today’s strong gains taking December gold above $2,700 an ounce, according to Kitco.
The weakening of the US dollar has contributed to the increase in gold prices today. As of 12:15 on September 25 (Vietnam time), the US Dollar Index, which measures the fluctuations of the greenback against 6 major currencies, fell sharply to 99.975 points (down 0.18%).
The main driver behind the surge in gold and the weakness in the US dollar is the recent monetary policy adjustment by the US Federal Reserve.
Last week, the central bank made a 50 basis point cut to its benchmark interest rate, lowering the federal funds rate to a range of 4.75% to 5.0%.
When explaining this decision, FED Chairman Jerome Powell stated: "Recalibrating our policy stance will help maintain the strength of the economy and the labor market."
The rate cut, which was aimed at supporting employment, had the effect of weakening the US dollar. Investors immediately rushed to gold as a safe-haven asset, not only to cope with the Fed's policy change but also with the deteriorating economic situation.
The Conference Board's US consumer confidence survey showed a significant drop of 6.9 points, the largest monthly drop in three years.
All five components of the index, which include assessments of business and labor conditions, stock prices, interest rates, inflation expectations and purchasing plans, recorded declines.
In addition, escalating geopolitical tensions in many parts of the world continued to support gold prices. Investors turned to gold as a traditional hedge against global instability.
A combination of economic and geopolitical factors has significantly strengthened gold's appeal as a safe haven, with the precious metal soaring to unprecedented highs as a result.
Experts say that in the coming time, gold prices will still be guided by the FED's monetary policy decisions, the trajectory of the USD and geopolitical developments around the world.
Amidst these uncertainties, gold's status as a reliable store of value has been further cemented, making it an essential component of many people's investment portfolios.
Update on world gold price: As of 12:20, the world gold price listed on Kitco was at 2,659 USD/ounce, an increase of more than 146 USD/ounce compared to a month earlier.
Update domestic gold prices HERE...
