Gold is one of the most precious metals on the planet. It’s been a valuable commodity used for trade for centuries, and after an up-and-down summer the price of gold as hit a three and a half-month high, according to The Wall Street Journal. The main reason experts give for the recent surge is due to investors discounting the chance the U.S. Federal Reserve will raise interest rates, and there have been a great deal of purchases from Chinese investors trying not to get beat up by the volatile stock market.
“We have seen interest from Chinese consumers and investors rising again on gold,“ said Daniel Meng, analyst at brokerage CLSA in Hong Kong. “We believe this is partly related to the turmoil of A-share market and some worries about the recent renminbi depreciation.”
The price of gold at the time of this writing was about $1,174 per ounce, which is the highest it’s been since July 1. It’s risen by 5% this month alone, according to Bloomberg.com.
The Fed was set to raise interest rates soon but issued a statement last week that it might not be the right time due to current economic conditions. In the United States alone, more than $7.6 trillion worth of gold is circulated or deposited.
As the dollar has slightly declined over the last couple months, the price has of gold has gone the other way as is typically the case. The U.S. Commerce Department is set to release more data this week pertaining to gold sales and U.S. inflation numbers that people in the industry believe could have an impact on the direction the price will go.
“We are expecting more dollar weakness,” said Howie Lee, analyst at Phillip Futures Ltd. “It also looks like there is a bump up in [gold] demand from China because of concerns about the stock market.”
Some speculate that the series of upcoming Hindu festivals are playing a role in Chinese gold interest. During these festivals, it’s traditionally believed to be favorable time to buy gold.