A milestone was reached last Friday when a gold bar worth a million US dollars was achieved for the first time in history. Analysts attribute the sharp rise and sustained high value of gold prices on Friday afternoon to the weakening of the US dollar and the decrease in US Treasury bond yields. Additionally, regional banks have been encouraged to invest cash in the real economy rather than in bonds, prompting Chinese buyers to turn to gold as a safe-haven asset.
This significant milestone of a million-dollar gold bar was reached on Friday, August 15, as the spot gold price broke the $2500 per troy ounce barrier, setting a new all-time high. Gold bars typically weigh around 400 troy ounces, meaning each bar is valued at over a million US dollars.
However, this figure may vary slightly. According to data from the London Bullion Market Association, while London market gold bars usually weigh around 400 troy ounces, they could contain anywhere from 350 to 430 troy ounces of pure gold. Additionally, individuals can also purchase smaller, more affordable gold bars, such as those sold by Costco.
According to data from consultancy firm Metals Focus, in the first half of this year, global central banks net-purchased 483.3 tons of gold, equivalent to nearly 40,000 gold bars. This has been one of the factors supporting the strong rise in gold prices so far this year.
Leading up to the Federal Reserve meeting, there is a general market expectation for gold prices to continue to rise, with some analysts even predicting that gold prices could reach $3,000 per ounce next year. However, David Meger of High Ridge Futures cautions that if the Fed only signals a 0.25 percentage point rate cut without hinting at a larger cut, the market might be disappointed.
Naeem Aslam, Chief Investment Officer at Zaye Capital Markets, also notes that the rapid rise in gold prices has reached a level that is making many traders hesitant. He emphasizes that if Federal Reserve Chairman Jerome Powell does not clearly indicate the possibility of further rate cuts, gold could face selling pressure.
