Gold Hovers Around All-Time High as Central Bank Actions Drive Up Demand

All that glitters may not be gold, but gold certainly does shine these days.

U.S. gold futures traded near record highs on Thursday, down just 0.17% from the previous day to $2,311.20 an ounce. Spot gold price also hit a record high of $2,304.90.

Central banks have increased their holdings of gold in recent months, increasing demand for it.

According to reports, the People’s Bank of China is particularly active in the market. Retail investors in China are following suit and increasing their gold purchases, according to Bank of America analysts. Some of the interest in retail may come from investors looking for a safe haven alternative to Chinese stocks and housing.

Fed Chairman Jerome Powell said Wednesday that Fed officials continue to expect rate cuts this year. Some investors may be buying gold as a hedge against higher inflation that a rate cut could cause.

Gold prices have risen about 11.2% since the beginning of the year, slightly outpacing the S&P 500’s 10% rise. Oil prices rose 18%. Treasuries and investment-grade bonds have fallen this year. Bitcoin prices have risen more than 50% since the beginning of the year.