Gold has attracted investors' attention due to two factors: the Fed and the crisis in the Middle East.
Gold rose 5.7% in July to close at $2,473 an ounce, driven largely by investor expectations that Fed will cut interest rates at its meeting on July 31.
Trading after the meeting showed continued dynamic growth and even broke the $2,500 barrier, reaching $2,502 per ounce at one point.
The prospect of lower interest rates or a declining value of the dollar means that gold becomes increasingly attractive to investors looking to park their money in a safe haven asset. In addition, the price of gold bullion is typically inversely related to interest rates, and rising interest rates reduce investor enthusiasm for gold.
Although Jerome Powell announced on Wednesday (31.07. 2024) a reduction in interest rates, this will happen in September, and the “equation” was supplemented by the onset of the crisis in the Middle East, since after the assassination of the leader of Hamas Ismail Haniyeh In Tehran, investors turned to gold amid fears of an escalation in the Israeli-Palestinian conflict.
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