Gold soared past $2,100 in Asian dealings on Monday, setting a new high for the third consecutive day.
On Friday, spot gold closed at $2,070.10, just $10 shy of the record high achieved in May.
Comex's continuous contract of gold futures, which merges the most active contract month into the next, broke the record high, closing at $2,091.30 after surging by over $35 in a single day.
On Monday, the spot price jumped sharply in early Asian dealings across Asia.
Comex’s continuous price was around $2,106 an ounce just after 1.30 pm Sydney time, and the spot price touched $2,110.80 an ounce. It eased back under the $2,100 level to trade around $2,088 for December or spot metal.
The February front month was around $2,106 an ounce.
Driving the surge is the continuing belief that bond yields are falling and won’t rise.
“The anticipated retreat in both the USD and interest rates across 2024 are key positive drivers for gold,” UOB’s Head of Markets Strategy, Global Economics and Markets Research, Heng Koon How, told CNBC via email. He estimated that gold prices could reach up to $2,200 by the end of 2024.
Another analyst told CNBC: “There is simply less leverage this time around vs 2011 in gold ... taking prices through $2,100 and putting $2,200/oz in view,” said Nicky Shiels, head of metals strategy at precious metals firm MKS PAMP.
Bart Melek, head of commodity strategies at TD Securities told CNBC on Monday that he expects gold prices to average $2,100 in the second quarter of 2024, with strong central bank purchases acting as a key catalyst in boosting prices.
He did caution that a possible policy switch by the Fed in 2024 could also be on the cards, and investors should remember that lower interest rates tend to weaken the dollar, making gold cheaper for international buyers and driving up demand.