In a historic move, the price of gold surged to a new all-time high on Wednesday following the Federal Reserve’s decision to cut interest rates by a significant half percentage point.
This aggressive rate cut, aimed at stimulating the US economy, has once again put the spotlight on gold as a haven for investors seeking stability.
By 2:50 p.m. ET, spot gold had risen 1.0% to $2,596.25 per ounce, while US gold futures mirrored the trend, trading at $2,617.88 per ounce in New York.
These record prices are the latest in a series of gains that have unfolded over recent weeks, driven by growing expectations of Fed intervention.
For over a year, the US central bank had maintained rates at a two-decade high, leading to a tense build-up in the markets. The rate cut was widely expected, though the size of the reduction left traders divided.
Speculation had been rife that the Fed might deliver a larger cut than the quarter percentage point typically expected — a scenario that would provide a strong tailwind for gold, which thrives in low-yield environments.
Historically, gold has shown a close relationship with Federal Reserve rate cuts. As seen in the previous six easing cycles since 1989, gold prices, alongside Treasuries and the S&P 500 Index, have often risen when the Fed starts loosening monetary policy.
However, this recent move by the Fed also marks the end of a unique period for the gold market. Over the past few years, gold prices have defied the traditional inverse relationship with real yields, remaining at elevated levels even as interest rates surged.
This resilience has been supported by unprecedented central bank purchases and strong demand from key markets in Asia.
The price of gold has soared over 25% this year alone, reaching successive records. As Western investors increasingly return to gold, betting on the Fed’s pivot, we’ve witnessed a notable uptick in demand.
Gold-backed exchange-traded funds (ETFs) have seen inflows for 10 of the past 12 weeks, and long-only positions in Comex gold futures are now at their highest level in nearly four years.
As the Fed’s rate-cutting cycle unfolds, the gold market appears poised for further growth, cementing its status as a key asset in uncertain times. Investors, traders, and analysts will be watching closely to see just how far this historic bull run can go.
Is Now the Right Time to Sell Your Old Gold?
With gold prices hitting record highs in 2024, many are wondering if now is the perfect time to sell old gold jewelry, coins, or bullion.
Gold has long been a store of value and a hedge against economic uncertainty, and in today’s economic climate, it’s gaining even more attention.
But before you rush to sell your gold, let’s explore whether the current market conditions make it the right time to part with your precious metals.
Record Gold Prices: Why the Surge?
Gold prices have soared this year, driven by a mix of economic and geopolitical factors. One of the main drivers has been the Federal Reserve’s decision to cut interest rates, which has lowered yields on traditional assets like bonds, pushing investors toward non-yielding assets like gold.
Central bank buying, especially from emerging markets, has also supported prices, as has rising demand from Asia.
Inflationary pressures and fears of a global economic slowdown have only added to gold’s appeal as a safe haven. As a result, gold prices have surged more than 25% this year, setting record highs.
If you’ve been holding onto old gold jewelry or coins, this could be an ideal opportunity to cash in.
When Selling Gold Makes Sense
For many, selling gold right now makes perfect sense. If you’ve been waiting for the right moment to offload old gold jewelry or scrap gold, this could be it.
High prices mean you’ll likely get more for your gold than in recent years.
Selling at a time when gold is in demand allows you to take advantage of favorable market conditions and maximize your return when you sell gold.
