Gold prices hit another all time high of $2619.36/oz on Friday morning. The price of gold is currently trading at $2604.74, up $18.58. The price of silver is trading at $31.03, up 25 cents.
Gold has experienced a significant boom in the past two years, outperforming both equity indices and fixed income with a 54% profit since September 2022. This surge can be attributed to several factors, including increased demand from central banks diversifying their reserves, new industrial applications, limited supply growth, and the current economic climate of moderating inflation and anticipated interest rate cuts. Gold’s appeal as a trusted, liquid asset with no counterparty risk has also contributed to its rising value.
However, investing in gold requires caution and patience. While it can be a great store of value over the long term, gold’s price is highly volatile and can remain stagnant for extended periods before suddenly surging. The asset’s performance can vary greatly depending on the timeframe considered, and there’s no inherent measure of its fair value. As such, while the current momentum favors gold, potential investors should be aware that the pendulum could swing back, potentially leading to prolonged periods of underperformance.
