Glittering gold prices at all-time highs

Gold prices are shining, with the New York spot price in afternoon trading Tuesday at $2,271.80 per ounce, up roughly $20.30 per ounce from a day earlier, as tensions in the Middle East continue to grow and investors look to gold as a safe haven.

Anaylsts said tensions in the Middle East heightened this week with an air strike on Iran’s embassy in Damascus, Syria, that killed three senior members of the Iranian Revolutionary Guards and was blamed on Israel and an Israeli air strike in Gaza that killed seven World’s Central Kitchen workers. Also, in Europe, Ukraine is still fighting off Russian invaders.

Economic news in the U.S. also contributed to the spike in gold prices, analysts said.

Gold price tracks money supply

Neils Christensen wrote for Kitco on Tuesday morning that economic data “continues to be ignored by the broader gold market as prices continue to move from record highs to record highs. Gold is pushing within striking distance of $2,300 an ounce as the U.S. labor market appears to stabilize.”

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The U.S. Labor Department reported in its Job Openings and Labor Turnover Survey that openings dropped to 8.76 million as of Feb. 29, according to Christensen’s report.

Rising U.S. Treasury yields also may have affected gold prices, as well as expectations of a Federal Reserve rate cut in June, wrote.

The proximity to $2,300 an ounce came in June futures trading. The late morning futures price for June was $2,294.70 per ounce.

London markets don’t open until April 3, but the last London p.m. fix price was $2,214.35 per ounce on March 28, the highest in 2024.

Shares in a half-dozen mining companies that produce gold in Nevada went up on Tuesday, as well. Barrick Gold Corp. shares were at $17.04, up 18 cents, in early afternoon trading, and Newmont Corp. shares were at $36.69, up 26 cents. Barrick and Newmont are joint venture partners in Nevada Gold Mines.

Kinross Gold Corp. shares were at $6.23, up 7 cents, and Coeur Mining shares were at $4.19, up a penny. SSR Mining shares were at $4.78, up 8 cents. First Majestic Silver Corp. shares were at $6.38, up 16 cents.

Bullish for gold

BCA Research increased its gold price target to $2,300 an ounce last week, according to a later report from Christensen, who said BCA has been bullish on gold since November 2022 as gold demand from central banks in emerging markets changed the dynamics of the marketplace.

The firm has only become more bullish on gold since that time, Robert Ryan, chief commodity and energy strategist for the Montreal-based firm, told

Tim Hayes, chief global investment strategist at Ned Davis Research, wrote in a recent note quoted by CNBC while the current economic scenario has been good for stocks, “it’s been even more bullish for gold.”

He told CNBC a weakening U.S. dollar and falling bond rates have boosted gold prices.

“Gold has been a long-term investment strategy for millions of people,” Michael Broughton, founder and chief executive officer of ALTRO money app, told CBS News.

Gold “has always been a tool to counter inflation,” he said. reported on Monday leading banks were positive about gold, including JPMorgan Chase, which said in late February gold was its No. 1 pick in commodities markets and predicted the price may reach $2,500 an ounce this year.

World Gold Council

Although gold is considered a safe-haven investment, the World Gold Council said in a new report that perceptions of gold have changed substantially over the past two decades, reflecting increased wealth in the East and a growing worldwide appreciation of gold’s role within an institutional investment portfolio.

Gold’s unique attributes as a scarce, highly liquid, and uncorrelated asset enable it to act as a diversifier over the long term. Gold’s position as an investment and a luxury good has allowed it to deliver annualized returns of nearly 8% since 1971, when the U.S. gold standard collapsed. Over this period, gold’s long-term return is comparable to equities and higher than bonds and commodities. Gold has also outperformed many other major asset classes over the past 3, 5, 10 and 20 years, according to the report.

Gold chart - performance over the years

Gold’s traditional role as a safe-haven asset means it comes into its own during times of high risk. But its dual appeal as an investment and a consumer good means it can generate positive returns in good times, too, the World Gold Council wrote in the 2024 edition of Gold as a Strategic Asset report.

This dynamic is likely to continue, reflecting ongoing political and economic uncertainty, and economic concerns surrounding equity and bond markets, the World Gold Council predicts.

The report also says gold is a highly liquid asset that is no one’s liability, carries no credit risk and is scarce, “historically preserving its value over time.” Gold also benefits from diverse demands that include investment, reserve assets, gold jewelry, and technology uses.

Setting gold price

Also looking at gold prices and threats from a group of countries, two Canadian mining experts, Pierre Lassonde, chairman emeritus of Franco-Nevada, and Frank Giustra, CEO of Fiore Group, told Kitco in a 1 panel discussion on Monday the West has lost its power to set the gold price, and China is the gold-price setter.

Lassonde was quoted as saying that “the world hasn’t woken up yet. The marginal buyer of gold is no longer the U.S. It’s no longer Europe. Between the country’s central bank and the Chinese public, China takes up over two-thirds of all the annual production.”

Giustra said that BRICS Plus, which now includes Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, Ethiopia, Iran, and the United Arab Emirates, can get up one morning and say they are going “to back their collective new currency with gold,” which they can now set to create more credit and reserves.

A coordinated move by the BRICS Plus against the U.S. dollar could lead to violent results, he warned.

“No one wants war, but here’s the problem — the U.S. is facing an existential threat. It’s a national security issue,” Giustra said. “If there’s a sudden move towards replacing the U.S. dollar, meaning perhaps a BRICS announcement of a new currency [backed by] gold, I think then it would react quite violently.”

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