Daily Spotlight: Gold Prices Pull Back from Peak

Summary

When global economic conditions become unpredictable, investors often flock to gold. Currently, the yellow metal is trading above $2,600 per ounce, up almost 27% for the year and not far from the highest level in the past 25 years. The rally in the yellow metal has been building for some time. During the first phase of the global pandemic, as uncertainty abounded, the spot price for an ounce of gold jumped 33% in six months and broke through the $2,000 level. Gold spot prices also spiked above $2,000 in early March 2022 due to the war in Ukraine, and are now at even higher levels as tension simmers in the Middle East and East Asia. Gold is near all-time highs in the wake of a rally in the dollar after the U.S. presidential election. The current price of gold reflects the perceived safety of hard assets amid the global conflicts, as well as expectations for lower U.S. interest rates — which tend to weaken the dollar (the currency in which gold is priced). The outlook for additional Federal Reserve rate cuts also helps gold, as lower rates reduce the risk for a global economic recession and thus a potential decline in gold purchased for jewelry. Looking ahead, our forecast trading range for gold in 2025 is $2,800-$2,300, and our average forecast for the

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