Last September when gold prices were sinking, The Trends Journal forecast that prices had bottomed. As we go to press, spot gold is selling at $2035 per ounce. 

And now the major media is also on the Gold Bull Run. Comex gold’s price continued its six-month rally last week, on 5 May coming within cents of its all-time record high price of $2,072.49, the Financial Times reported.

U.S. investors have turned to gold as a safe store of value while fears linger over the safety of the U.S. banking system.

Also, strong demand returned among China’s luxury consumers, who snapped up gold bars, coins, and jewelry during this year’s first quarter as the country emerged from three years of stringent anti-COVID lockdowns.

The price has since eased and was trading at $2,028.50 at 5 p.m. U.S. EDT on 8 May.

Gold bugs pulled back from the high due to the growing likelihood that the U.S. Federal Reserve has increased its key interest rate for the last time this year. If rates hold steady, many investors could shift from gold to bonds, which pay a yield, the WSJ noted.

Gold’s price has been pushed up over the past six months by a buying spree among central banks, which we detailed in “Central Banks Are Grabbing Gold” (8 Nov 2022). Those banks grabbed another 228.4 tons during this year’s first quarter, a record for any three-month period.

China, Russia, and various Middle East countries are thought to be among the heaviest buyers, although they do not report gold purchases to the International Monetary Fund as many other countries do.

Whether gold’s rally continues depends on the direction of the U.S. banking crisis, the U.S. Federal Reserve’s next decision regarding interest rates, and the dollar’s strength or weakness, according to John Reade, chief market strategist at the World Gold Council.

TREND FORECAST: Gold is golden. The guess on The Street is that by year’s end the Federal Reserve will lower interest rates. Thus, the lower interest rates fall so too will the dollar decline, and the deeper the dollar falls, the higher gold prices will rise. Gold at $2240 by 2024 is on-trend.