Rising worldwide geopolitical concerns and a recent interest rate drop by the U.S. Federal Reserve have drove gold prices to an all-time high. On September 23, the precious metal hit a record $2,629 per ounce, up over 5% from two weeks before. Announced on September 18, the rate fall dropped interest rates by 0.5%, so gold became more appealing as investors looked for inflation hedges.
Global uncertainty including the approaching U.S. presidential election, Israel and Hamas, and continuing hostilities between Russia and Ukraine have also driven the value of gold upward. These elements have driven central banks all around to quadruple their gold purchases starting early 2022, hence increasing demand.
If interest rates keep declining, gold might hit $2,700 by 2025 according to financial experts. Some contend that even with the record prices, gold hasn’t reached its inflation-adjusted peak—which was $3,200 back in 1980.
Bitcoin, also known as “digital gold,” has also witnessed a notable rise concurrently. Bitcoin’s price has increased by 8.5% after the Fed’s rate decrease, rising to $64, 660 on September 23. Following seasonal patterns like to those seen in 2023, some crypto analysts—like Markus Thielen of 10x Research—predict that Bitcoin might experience a significant breakthrough by the end of 2024.
While gold and bitcoin are rising, the financial markets show a more general pattern of investors seeking alternative assets in front of economic uncertainties. The investing scene is still shaped by central bank policies and world events, hence the next months can see even more changes in both conventional and digital markets.
