The price of gold bar tops $1 million for the first time, thanks to rising prices of the precious metal.
Namely, the price of gold on the world market reached $2,500 per troy ounce on August 16th. This price has increased by 20 percent since the beginning of the year.
As reported by CNN, the rise in gold prices may be a sign that investors expect the Federal Reserve of the United States – U.S. (FED) to lower the benchmark interest rate soon.
Central banks, including China’s, are buying gold to ease reliance on the U.S. dollar. The aforementioned banks, as well as investors, see this precious metal as a long-term, reliable means of preserving value due to economic turmoil.
So when interest rates are lowered, gold prices tend to rise as gold bullion becomes more acceptable than bonds. In addition, investors see gold as a hedge against inflation because gold retains its value due to inflation, reports CNN.
