Gold on track for its biggest annual gain since 1979

Rising expectations of US interest-rate cuts, concerns about the Federal Reserve’s independence and doubts about debt sustainability have pushed gold to record highs. The price of gold has risen more than 40% per ounce this year and is on track for its biggest annual gain since 1979.

The rally is driven mainly by geopolitical risks, concerns about the global economy, central-bank demand for gold and the Fed’s rate-cutting cycle. Gold began the year at USD 2,623 an ounce and climbed on heavy buying. It rose 6.67% in January, 2.17% in February, 9.26% in March, 5.26% in April, 0.03% in May and 0.41% in June.

Although it fell 0.39% in July, it bounced back 4.8% in August and rose 8.54% in September. Gold hit a record USD 3,791 an ounce and is up about 43% since the start of the year. Since 1979, the price of gold has risen 126.5% in total.

Hamad Hussain, climate and commodities economist at Capital Economics, told Anadolu: “Rising expectations of US rate cuts, concerns about the Fed’s independence and worries about debt sustainability have pushed gold to new records.” He added: “Gold’s rally is likely to continue, as factors such as central-bank purchases and strong investor demand in China remain the main drivers. As a result, gold is expected to reach around USD 4,000 an ounce next year.”