Gold shatters another record due to the ECB’s rate cut and the crisis in the Middle East and exceeds $2,700

Gold has done it again and another record was set yesterday –the umpteenth this year- by being above 2,700 dollars (2,489 euros); exactly, it reached $2,704.89 in Asian morning trading, above its previous record of $2,688.83, which already hit the headlines only on Thursday. The same thing happened in September ($2,570), or in May (2,441).

What these results say is that investors continue to consider the precious metal a safe value to turn to as a refuge when monetary stability is not guaranteed. Precisely, today’s record occurs one day after the ECB agreed to a new drop in interest rates (the third this year, which leaves the main rate at 3.25%). The objective of the institution chaired by Lagarde is to encourage the eurozone economy through monetary relaxation, and this mechanism always drives the precious metal upward, among other things due to fear of inflation.

Other factors that have increased the purchase of gold have been the uncertainty surrounding the geopolitical risks derived from the conflicts in the Middle East, where Israel is fighting Hamas in Gaza and Hezbollah in southern Lebanon, triggering fears of a regional conflict involving to Iran, and to the US presidential elections. Likewise, another factor that analysts point out is the concern about the war in Ukraine, which has also led to an increase in the search for safe investments.