Gold Prices Strengthened Through August 2024, Will the Trend Continue?

Based on World Bank data, the price of 99.5% fine gold (London Fix Afternoon Price) has been steadily rising since the beginning of the year, reaching US$2,470 per troy ounce in August 2024.

This price represents a near 29% increase year-on-year and sets a new record high in World Bank records.

According to the World Gold Council (WGC), the increase in global gold prices in August 2024 was influenced by various factors, one of which is the macroeconomic and political dynamics in the United States (US).

"Gold prices rose due to a significant decline in the US dollar, as well as lower 10-year US treasury yields, as the Fed signaled potential interest rate cuts," said the WGC team in a report on its website on Thursday (September 5, 2024).

Amidst this situation, the WGC believes that gold prices still have the potential to rise, despite the uncertainty.

"We can only speculate on how broader macroeconomic data might influence market reactions. However, it appears that election dynamics and expectations of interest rate cuts in the US have increased gold trading activity," said the WGC team.

"Under these circumstances, it's natural for investors to focus more on the short-term outlook. Their behavior suggests they view gold as a hedging instrument, while also positioning gold to benefit from lower interest rates," they continued.