Gold Prices Surge Above $4,400 Amid Geopolitical Uncertainty

Gold prices have surged in recent days, breaking above $4,400 per ounce after hovering around $4,050 an ounce earlier this summer. The increase is attributed to a combination of factors, including ongoing geopolitical uncertainty surrounding the US-Iran conflict and the situation in the Strait of Hormuz.

The uncertain economic future of the US and expectations regarding the Federal Reserve's monetary policy are also playing a significant role. Investors tend to seek safe-haven assets like gold when they anticipate lower interest rates, as this reduces the attractiveness of interest-bearing assets.

Central banks have continued to buy gold, with a net 289 tonnes purchased in the second quarter, representing a year-on-year increase of 62%. This trend is driven by efforts to diversify foreign exchange reserves and reduce dependence on traditional reserve assets, particularly the US dollar.