Gold Could Break A Record $2,000 As Feds Cut Interest Rates

Kevin Mwanza
Written by Kevin Mwanza
gold interest rates
FILE – In this Tuesday, July 22, 2014, file photo, gold bars are stacked in a vault at the United States Mint, in West Point, N.Y. Many investors are buying gold because they’re worried that the good times are about to end for other investments such as stocks and bonds as central banks cut interest rates. (AP Photo/Mike Groll, File)

Gold prices could break a record high of $2,000 an ounce within the next two years, Citigroup said in a report, citing rising risks of a global recession and the potential for the U.S. Federal Reserve to reduce interest rates to zero.

Seen as a safe-haven asset for fearful investors, gold is expected to gain value from a combination of economic and geopolitical events that could weaken the dollar.

Expecting to see interest rates cut

This includes the likelihood that the U.S. Federal Reserve and the European Central Bank could start easing their policies to counter a global economic slowdown.

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“We expect spot gold prices to trade stronger for longer, possibly breaching $2,000 an ounce and posting new cyclical highs at some point in the next year or two,” Citi wrote in the report.

If gold breaches the $2,000 ceiling it would beat the record high of $1,917.90 an ounce reached on Aug. 23, 2011, and another intraday high of $1923.70 on Sep. 6, 2011, according to Wallstreet on Parade.

Central banks across the world are already piling up on gold reserves and purchased more gold in the first six months of 2019 than any other time in almost two decades, according to first-half data released by the World Gold Council.