Gold Price Soars 15 Points Prior to Vital Fed Meeting: Impact on Crypto?

• Unprecedented Rise in Gold Prices Prior to Fed Meeting
• Factors Driving the Sharp Increase in Gold Prices
• Will Gold Reach the $2,100 Benchmark Next?
• Geopolitical Conflict and its Impact on Gold Prices
• Gold Price Forecast for 2024

Unprecedented Rise in Gold Prices Prior to Fed Meeting

On Tuesday, hours before the anticipated Fed meeting, the price of gold witnessed a remarkable surge. Officials will convene at the meeting to discuss impending interest rate measures. The UAX/USD spot gold price climbed from a low of $1,977 to $1,992 post the opening bell, marking a significant one-day hike of 15 points. This steep increase has lured a massive inflow of capital into the gold markets from international institutional investors.

Factors Driving the Sharp Increase in Gold Prices

The impressive leap in gold prices follows a period of sustained weakness for the US dollar, along with lower treasury yields resulting from increased rate hikes. The release of the Federal Reserve's minutes is looming, and this scenario is generating strong reactions from both stock and commodity markets. Recently, the price of gold has been on a substantial rally, spurring a shift of institutional investors from US treasury bonds to gold markets as a haven for their investments. Gold is typically viewed as a dependable investment, providing a hedge against inflation during downturns in the global market.

Will Gold Reach the $2,100 Benchmark Next?

Several analysts are envisioning that gold prices could escalate to $2,100 by late 2023 or early 2024. The Federal Reserve's strategy of enhancing interest rates to regulate and diminish inflation to below 2% could potentially trigger a spike in the gold price. In addition, the ongoing conflict in the Middle East is stirring volatility in the stock market, prompting institutional investors to strategically invest in gold as a secure option.

Geopolitical Conflict and its Impact on Gold Prices

No calls for an immediate ceasefire in Israel and Palestine have been made by the US and its Western allies. As a result, the conflict is predicted to intensify, potentially leading to greater capital inflow into gold. This scenario could further propel gold prices, allowing them to hit new annual highs.

Gold Price Forecast for 2024

Forecasts suggest that gold prices could attain an unprecedented record of $3,000 in 2024. Amidst worldwide economic uncertainty and rumours of a potential recession, the UAX/USD spot gold is perceived as a safe haven.

Edited by Jonathan Stoker