The Gold price rose to $2,667 per troy ounce yesterday, coming within less than $20 of its all-time high reached at the end of September, Commerzbank’s FX analyst Carsten Fritsch notes.

Gold price comes close to its all-time high again

“This is all the more remarkable given that expectations of interest rate cuts by the Fed have been scaled back significantly since the beginning of October. At the beginning of the month, 75 basis points of interest rate cuts were still expected by the end of the year, but now the expectation is just under 50 basis points.”

“The fact that the Gold price came under pressure only briefly and has since recovered most of its losses is likely due to the increased geopolitical risks in the Middle East. As a non-interest-bearing investment, Gold benefits not only from expectations of interest rate cuts, but also from its safe-haven status.”

“Should the media reports prove to be true and Israel spare Iran's oil and nuclear facilities in the expected retaliatory strike, geopolitical risks would decrease and support for the Gold price from this side would also fade. We therefore see slight downside risks for the Gold price and expect the Gold price to be $2,600 at the end of the year.”