At one point, the precious metal traded for $2031 on the London Stock Exchange. This makes the precious metal more expensive than it has been for more than a year.

DLNews Business:

Growing fears of a recession in the US are driving the gold price toward a record high just before Easter.

During the week, little was missing from the mark of $2,075 per troy ounce from the summer of 2020. At times, the precious metal was traded on the London Stock Exchange for $2,031. This makes the precious metal more expensive than it has been for more than a year.

A key driver for the increasing demand for gold is the price development on the foreign exchange market. The US dollar has lost value due to the disappointing US economic data and the recent banking sector turbulence following several regional banks' bankruptcy in the US.

As a result, gold traded in dollars is becoming cheaper on the world market, which increases demand.

In March, the turbulence in the banking sector had startled investors and, at times, pushed the price for a troy ounce (31.1 grams) of the precious metal above the 2000 US dollar mark.

A possible slide of the US economy into recession is now considered an important price driver.

Weak data on service sentiment recently increased concerns about a contraction in the world's largest economy. This fueled speculation that the US Federal Reserve would stop raising interest rates.

 

Should interest rates stop rising or even fall again, this could increase demand for investments in gold.

According to experts, the development of inflation in leading industrialized countries will play a significant role in the further development of the gold price.

Central banks have been raising interest rates for many months in the fight against high inflation. The result is rising yields for fixed-income securities such as government bonds. Since investments in gold do not yield any interest, demand had suffered in the past year, and the price of gold had fallen to almost $1,600 last fall.