Gold Hits New All-Time High — Ounce-Related Coins Follow Suit

Key Takeaways

• Gold prices have surged to near-record levels, driven by various factors.
• The aggressive interest rate cuts by the Federal Reserve have significantly boosted gold’s appeal as a safe-haven asset.
• Gold-backed cryptocurrencies, like PAX Gold, Tether Gold, and Meld Gold, have also increased prices.
• Analysts remain bullish on gold, predicting further price increases.

Gold prices have reached unprecedented levels, driven by a combination of factors, including the Federal Reserve’s aggressive interest rate cuts and escalating geopolitical tensions. As the U.S. central bank continues to ease monetary policy, gold has strengthened its safe-haven asset profile, attracting strong investor demand.

With ounce prices hitting new highs, gold-backed cryptocurrencies have also experienced significant gains. These derivative digital assets, pegged to the value of physical gold, are becoming increasingly attractive to investors looking for the stability of gold combined with the advantages of digital assets.

Gold Hits New Record High

Gold prices  hovered near record highs on Monday, Sept. 23, buoyed by the Federal Reserve’s aggressive interest rate cut and expectations of further reductions. Spot gold held steady at around $2,619.37 per ounce, just below its recent record high. U.S. gold futures declined slightly by 0.1% to $2,643.90.

The low interest rate environment and ongoing geopolitical tensions have strengthened gold’s appeal as an investment. Last week, the U.S. Federal Reserve cut its interest rates by 0.50%, the first diminishing action since the hikes due to the COVID-19 pandemic.

Also, the conflict between Hezbollah and Israel, marked by heavy exchanges of fire, has further fueled demand for gold as a safe-haven asset.

Gold is poised for its best annual performance since 2020, with year-to-date gains exceeding 27%. Investors continue to view gold as a valuable hedge against global risks, supported by sustained purchases from central banks.

Related-Coins Prices Increase

Gold-backed cryptocurrencies are derivative digital assets whose value is pegged to the price of physical gold. These tokens often represent a specific quantity of gold held in reserve by the issuing company or a trusted custodian.

Some gold-backed tokens even allow for redemption into physical gold. Unlike speculative cryptocurrencies, the value of gold-backed tokens is tied to a tangible asset, offering greater price stability.

Many gold-backed cryptocurrencies are based on the ERC-20 standard, but there are exceptions, like PAX Gold. As the price of gold has risen, so too have gold-backed tokens. PAX Gold , for example, reached a new all-time high of $2,633 earlier today, while Tether Gold (XAUt) also set a new record.

Meld Gold, a gold-backed token on the Algorand blockchain, has experienced a slight increase despite recent volatility. Its market capitalization has reached a new high of $646.5 million.

What’s Next

The gold market remains bullish, with many analysts anticipating further price increases, potentially reaching $3,000 per ounce. This positive outlook is driven by several factors, including the continued monetary easing policies implemented by central banks worldwide.

Additionally, the upcoming U.S. presidential election, characterized by its close contest, introduces uncertainty and reinforces the appeal of gold as a safe-haven asset.

Antonio Ernesto Di Giacomo, Senior Market Analyst at XS, told CCN: “Historically, lower interest rates have benefitted gold, as the metal does not generate interest and, therefore, becomes more competitive than other interest-bearing assets like bonds. In a low-interest-rate environment, investors tend to seek assets that preserve value against potential currency devaluation, further boosting gold demand.”

According to Di Giacomo, analysts anticipate that gold prices could surpass $3,000 per ounce in 2025 and reach $2,700 by the end of 2024.

“This forecast is supported by several factors: continued interest rate cuts by the Fed, strong off-exchange physical demand, and growing interest in exchange-traded funds (ETFs) backed by gold. This metal will remain a strategic investment in the coming years,” he added.

About the Author

Giuseppe Ciccomascolo

Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors. Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.

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