Gold topped $2,700 an ounce for the first time, extending its already record-breaking year, as investors look at XAU as a haven investment. In a recent note, Bank of America warned that gold is the final safe haven in the United States amid risks related to rising national debt. Indeed, they argued that the metal has become more attractive than US Treasury bonds due to the risks of an impending debt crisis.
Investments are an integral part of the existing financial regime. It’s crucial for investors to seek profitable trades and claim additional investment rewards on those trades as part of the bigger financial picture. Over the years, the financial dynamics have undergone a serious change. US dollar-centric investments played a heavy role in determining a steady pace of consumer profits. However, gold is slowly replacing the US dollar by showing its remarkable price pace, tempting investors to explore the asset above.
What’s Causing Gold To Boom?
Escalating conflicts in the Middle East and a tight US election race are now prompting stock market experts to turn to gold. The precious metal reached a new high of $2,731.30 on Friday afternoon. “Traditional polls and decentralized betting polls have diverged significantly, even as we get closer to elections,” said Christopher Wong, FX strategist at Oversea-Chinese Banking Corp. “Trump hedges — long gold — may still gather traction given the fluidity of election developments and geopolitical uncertainties.”
Gold rallied about 2.3% higher last week, with demand continuing to soar. Rate-cut optimism fueled the most recent gains as the Fed kicked off its easing cycle last month. Furthermore, Western investors have also helped drive prices higher. The West remained on the sidelines in the first half of the year as Asian demand surged, particularly led by BRICS founder China.
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A recent post uploaded by Bravos Research highlighted a stark connection between the surging US dollar prices and gold. Per a recent X post uploaded by the portal, rising gold prices have often signaled an economic storm underway, indicative of a possible economic meltdown, which may usher in a strong USD decline.
How High Can Gold (XAU) Rise By 2025?
Commodity analysts from Goldman Sachs predict that gold prices could briefly hover around the $3,000 mark in 2025. According to the price prediction, gold could reach a new high of $2,973 by 2025, forecasted by Goldman Sachs. “We reiterate our long gold recommendation due to the gradual boost from lower global interest rates, structurally higher central bank demand, and gold’s hedging benefits against geopolitical, financial, and recessionary risks,” the analysts explained.