On August 16th, the international gold price hit a new all-time high again, reaching a maximum of $2,509.76 per ounce, with an increase of over 20% from the beginning of the year.

It should be pointed out that this increase is still based on the basis of a cumulative increase of more than 13% in the gold price in 2023. Even though gold has been strong for a year and a half, analysts still believe that it can create more records. Some institutions predict that as the Federal Reserve policy meeting approaches, gold prices will reach $3,000 next year.

As of press time, spot gold has fallen slightly and is currently fluctuating within the range of 2490-2496; intraday, the international gold futures main contract price once rose to $2,549.9 per ounce in the Asian session, also setting a new record, and has now fallen back to around $2,530.

Sabrin Chowdhury, the chief commodity analyst at BMI, a research institution under Fitch Solutions, said, "2024 is expected to be a year when gold prices will reach multiple new highs," emphasizing gold's appeal as a safe-haven asset.

Chowdhury said, "Gold continues to thrive due to uncertainty, which has peaked." She cited the US election year in 2024, the recent incursion of Ukraine into Russia, and increased tensions in the Middle East.

At the end of last month, Ismail Haniyeh, the Hamas political bureau leader, was assassinated in Tehran, the capital of Iran. The White House warned recently that Iran may launch attacks on Israel in the near future. Therefore, the Israeli army is in a state of "high alert".

Regarding Russia and Ukraine, the Ukrainian military launched attacks on the Russian Kursk state from the 6th of this month. Last week, Mikhail Shelemev, a Russian State Duma member, warned that the presence of Western military equipment in attacks meant that the world was on the brink of World War III.

In addition, the probability of a rate cut by the Federal Reserve in September has increased. Powell has hinted several times that the bank may carry out a series of rate cuts before the end of the year, depending on inflation and the labor market data, which has increased investors' confidence.

Lower rates are expected to lower the opportunity cost of buying gold, making it more attractive than other safe-haven assets such as US Treasuries. On the other hand, lower interest rates will also put pressure on the US dollar, which is bullish for the many commodities priced in dollars.

Chowdhury of BMI says, "Once the Federal Reserve begins to cut rates, and this is likely to be next month, the gold price could reach $2,700 per ounce." Other analysts have similar bullish sentiments.

Citigroup analysts said in a report on Monday that the sentiment of gold investors is expected to turn upward within a three to six month time window. They added that they expect the target price to be $3,000 per ounce by mid-2025, with an average price of $2,550 expected in the fourth quarter of this year.

It is worth mentioning that the annual Jackson Hole Global Central Bank Summit will be held this week, and Powell's speech on Friday may set the tone for a rate cut in September.

At present, the market generally expects the Federal Reserve to begin a rate cut cycle in September. If Powell hints at a 50 basis point rate cut in his speech, gold may rise further and hit a new all-time high again.

Editor/Somer