New York Gold Futures Reach Record High Above $2,600

New York gold futures closed above $2,600 for the first time on Friday, September 20, supported by interest rate cuts in the US and rising tensions in the Middle East.

The COMEX (Commodity Exchange) gold contract, set to be introduced in December, rose $31.60 or 1.21% to close at $2,646.20/oz.

The December money agreement also saw an increase, up 82 cents or 0.26% to close at $31.505/ounce.

In contrast, the January platinum contract fell $2.40 or 0.24% to close at $992.00/ounce, while the December palladium contract dropped $20.50 or 1.87% to close at $1,078.10/ounce.

Interest Rate Cuts and Geopolitical Tensions Boost Gold Prices

Gold prices received a significant boost after the Federal Reserve cut interest rates by 0.50% on Wednesday, adding to the attractiveness of non-interest bearing gold prices.

Considered a safe-haven asset, gold prices have risen 27% this year, marking the biggest annual gain since 2010, as investors snapped up gold amid uncertainty over ongoing conflicts in the Middle East and elsewhere.

Analysts Weigh in on Gold Price Surge

While some analysts suggest that the gold price surge may be due for a correction, others believe that gold contracts may rise further due to the depreciating US dollar, making gold prices cheaper for holders of other currencies.

Fawad Razakzada, an analyst at Forex.com, noted that “geopolitical risks, such as ongoing conflicts in Gaza, Ukraine, and elsewhere, will support the demand for gold as a safe-haven asset class.”

However, the record price surge in gold prices has reduced demand for gold in China and India.

By Kanlayanee Chewapich