The price of gold is climbing from record to record. At one point, a troy ounce of the precious metal cost 2,590 US dollars on the stock exchange – more than ever before. Turkey in particular is investing in gold.
The price of gold currently only knows one direction: up. The prospect of falling interest rates in the USA is responsible for the record-breaking price hike. Investors expect that the US Federal Reserve will also announce its interest rate turnaround on Wednesday. Stock market traders are speculating that gold could then become more attractive again. Although gold does not pay interest, the precious metal is becoming more interesting again compared to falling yields on government bonds.
Demand for gold is also high among central banks. Turkey has become the largest gold buyer in the world. Data from the World Gold Council show that Turkey bought almost 45 tons of gold in the first half of the year.
Strategic asset for central banks
For states, the precious metal is a strategic asset in particular. In view of the weak national currency, the lira, and high inflation, Turkey is looking for security, experts say. In addition, countries such as Turkey, China and India are trying to become less dependent on the US dollar by using gold reserves.
Gold at record high – also in euros
At the beginning of the week, the price of one troy ounce (about 31.1 grams) on the London Stock Exchange rose to 2,589.64 US dollars, the highest ever. In euros, the price also reached a record high today at 2,334.80 euros per ounce.
The price of gold has been rising sharply for about a week. During this time, the precious metal has gained almost four percent in value. With the prospect of falling interest rates, the US dollar has also recently lost value, which is giving the price of gold an additional boost.
Since gold is usually traded in US dollars on the world market, a weakness in the US currency makes the precious metal cheaper in many countries, which supports demand and thus the price.
With information from Constantin Röse, ARD finance editorial team
