In 2024, gold has seen tremendous growth thus far. The price of the product increased by more than 18% this year alone, from $2,063.73 per ounce on January 1 to $2,439.98 per ounce on May 20. Even if it has somewhat decreased recently, if you own gold or are thinking about buying some, you might be wondering if the rising trend will last for the remainder of the year. (Photo : by Mario Tama/Getty Images)
In 2024, gold has seen tremendous growth thus far. The price of the product increased by more than 18% this year alone, from $2,063.73 per ounce on January 1 to $2,439.98 per ounce on May 20. Even if it has somewhat decreased recently, if you own gold or are thinking about buying some, you might be wondering if the rising trend will last for the remainder of the year.
Supply and demand have a major role in determining the price of gold. Furthermore, although there is a limited supply of gold, demand tends to fluctuate; high demand usually results in price increases, while low demand usually results in price decreases. Having said that, there are three factors that might increase demand for gold in June and raise the metal's price.
The Impact of Ongoing Inflation and Federal Reserve Policies on Gold Prices
The ongoing inflation that the US has been suffering may have been noticeable to you at the grocery shop, petrol station, or anyplace else you make purchases. Furthermore, inflation typically benefits gold even if it could be detrimental to your finances.
This is due to the long history of gold being used as an inflation hedge. In essence, gold tends to grow in value in tandem with rising prices for goods and services, protecting investors' capital and the value of their saved assets.
On June 12, 2024, the following inflation report is expected to be made public. The May year-over-year inflation rate will be displayed in this report. Furthermore, the price of gold may rise in response if inflation stays too high for comfort.
The Federal Reserve regularly convenes sessions of the FOMC, or Federal Open Market Committee. Members of the Fed talk on monetary policy (interest rate rises or cuts, quantitative easing, quantitative tightening, and other topics) and the status of the economy at these meetings.
The outcome of these discussions might thus have a significant effect on the stock market, the economy, and the profits on interest-based assets. FOMC meetings, in turn, may potentially affect the price of gold.
In fact, and for good cause, the price of gold has recently increased around the time of Fed meetings. Gold is in higher demand during these periods because investors are using it as a hedge against any changes in interest rates or other monetary policies that may come from these meetings. Furthermore, the price of gold may rise in the middle of the month due to the next FOMC meeting, which is scheduled for June 11, 2024-June 12, 2024.
Geopolitical and Political Factors Influencing Gold Prices
Geopolitical and political factors can also have a significant impact on the price of gold. After all, laws that affect the financial markets and the economy may also alter when political leadership does. Furthermore, political unpredictability has the potential to raise the price of gold because it is a safe haven investment. Thus, any significant developments in the US presidential contest might influence the price of gold.
The flow of gold is also significantly influenced by geopolitical factors. This is due to the fact that geopolitical upheaval and conflict may affect economies globally. Regretfully, there's a lot of geopolitical upheaval going on right now. Although this may cause unease, any updates on the geopolitical landscape in June may cause the price of gold to rise.
The content provided on MoneyTimes.com is for informational purposes only and is not intended as financial advice. Please consult with a professional financial advisor before making any investment decisions.
