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Recent increases in gold prices have pushed the price of gold bars to surpass $1 million for the first time in history.
Bloomberg reported on August 16 that the spot price of gold surpassed $2,500 per ounce for the first time, causing gold bar prices to exceed $1 million. According to the London Bullion Market Association, a standard gold bar typically contains around 400 ounces. Thus, multiplying the current price per ounce by the bar’s total gold content confirms that the price of gold bars has indeed surpassed $1 million.
At the beginning of 2024, the price of gold was around $2,000 per ounce, and it has since steadily risen, now up more than 20%. This rise is mainly due to major central banks worldwide, including those in the U.K. and the European Central Bank (ECB), initiating interest rate cuts, with signs that the U.S. Federal Reserve may join in September.
When interest rates fall, demand for gold tends to increase due to lower holding costs, heightened attractiveness compared to other safe assets, and a decline in the dollar’s value, which can lead to lower gold prices. Additionally, the recent military conflicts in the Middle East, including between Israel and Iran, as well as between Palestinian militant group Hamas and Lebanese militant group Hezbollah, have heightened tensions in the region, further driving demand for safe assets like gold.
Following Russia’s invasion of Ukraine, countries such as China and Turkey, reacting to Western sanctions against Russia, have begun purchasing gold in large quantities to diversify their dollar-denominated assets. This trend has contributed to the rise in gold prices, according to Fortune. Bloomberg, citing data from the precious metals research firm Metals Focus, reported that global central banks net purchased 483.3 tons of gold in the first half of this year—equivalent to approximately 40,000 gold bars.
In this context, most experts believe the upward trend in gold prices will continue. On August 16, Commerzbank, a German bank, predicted in a report that gold prices could rise to $2,600 per ounce by mid-next year. Additionally, in July, Patrick Yip, senior director of business development at American Precious Metals Exchange, forecasted that if geopolitical uncertainties, interest rate cuts, and continued buying by global central banks persist, gold prices could reach $3,000 as early as next year.
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