Global gold prices hit new record levels on Friday, as gold futures rose by one percent to reach US$2,606 per ounce, while spot contracts rose by 0.75 percent to reach $2,578 per ounce.
This rise comes amid the weakness of the US dollar and high expectations of a US interest rate cut next week.
The “Investing” website reported the chief market analyst at KCM Trade, Tim Waterer, as saying: “Regardless of the size of the initial interest rate cut by the Federal Reserve, we appear to be on the verge of entering a long easing cycle, a scenario that bodes well for assets such as gold.”
These comments come after the International Monetary Fund announced on Thursday that the time was right for the Federal Reserve to begin a monetary easing cycle, as inflation risks recede.
The UBS global firm advised investors to consider allocating around five percent of their portfolios to gold, noting that the metal has historically outperformed stocks during periods of high volatility, a trend that has been confirmed again in recent months.
UBS analysts reiterated their bullish stance on gold, pointing to its value as a hedge and safe haven in light of economic and geopolitical volatility.
The UBS noted that gold has risen 23 percent this year, hitting its highest price ever, due to expectations of lower US yields and the continued trend of central banks diversifying their investments away from the dollar.
