Gold price continues to rise – record high still a bit away By dpa-AFX

LONDON (dpa-AFX) – It continued to grow on Thursday. On the London Stock Exchange, a troy ounce (around 31.1 grams) cost around $2,668 in the afternoon. The price of gold approached its record high of around $2,790, which was reached on October 31st.

The price of gold is affected by increased uncertainty in the wake of current geopolitical conflicts. The Ukrainian Air Force announced that Russia used, among other things, an intercontinental ballistic missile in its attack on Ukraine. The target was the industrial city of Dnipro in eastern Ukraine. In turbulent times, investors often seek refuge in gold.

Analysts from the banks UBS (SIX:) and Goldman Sachs (NYSE:) had recently expressed confidence about the price of gold. They expect the record hunt to continue in the new year.

Another possible driver was higher demand for gold from central banks. The background is concern about the sustainability of US government finances: The future US President Donald Trump had promised a number of tax cuts that could lead to a higher budget deficit.

The prospect of falling interest rates could also further boost the price of gold. In such an environment, the precious metal becomes more attractive because it does not generate interest.

In the USA, the President of the Federal Reserve Bank of Boston, Susan Collins, said that further key interest rate cuts were necessary. However, you should proceed with caution. Finally, Trump also planned to introduce lower import tariffs, which could fuel inflation again.

The potential for rising inflation under a Trump presidency could cause the Fed to delay or pause its interest rate cutting cycle, wrote Priyanka Sachdeva, market analyst at trading house Phillip Nova. This could make gold investors nervous.