The price of gold has risen above $2,200 U.S. for the first time and hit an all-time high.
Gold is currently trading at $2,211.20 U.S. an ounce, surpassing the previous record high of $2,195.15 U.S. an ounce reached earlier in March.
Commodities analysts are now forecasting that gold’s price could rise above $2,300 U.S. per ounce in the second half of this year as the rally in bullion continues.
Gold’s price is being pushed higher as central banks around the world continue to purchase the precious metal in record amounts, and as the U.S. Federal Reserve signals that it still expects to lower interest rates this year.
The price of gold tends to have an inverse relationship to interest rates. As rates decline, gold becomes more attractive than fixed-income assets such as bonds and its price rises.
Higher interest rates tend to reduce the appeal of gold compared with bonds as it does not pay any interest.
Expectations that interest rates will be moving lower later this year are helping to support the current rally in gold.
Demand for gold is also driven by its role as a safe-haven asset in times of geopolitical turmoil and uncertainty.
With conflict raging in Ukraine and the Middle East, central banks around the world have been increasing their gold reserves in recent months, further supporting the price rise.
