By Ketki Saxena
Investing.com -- Gold has always been a valuable commodity, and its price has rallied in recent months, breaking the $2,000 per ounce barrier this year for the first time since 2020. This surge can be attributed to various factors that are working in favor of gold at the moment.
One major factor driving up gold prices is its status as a "safe haven" asset. When there’s an economic downturn or geopolitical turmoil, investors tend to turn away from riskier investments and seek out safer options like gold. Additionally, declining bond yields can also drive up demand for gold as returns on other investments become less attractive.
As it stands now, investing in gold could be an option for investors looking for a safer investment opportunity as inflation continues to rise and interest rates taper out. And that's been the case so far in 2023.
Barrick Gold (NYSE:GOLD) Corporation is up over 10% since the start of the year while Newmont has grown 5%. Similarly, VanEck Gold Miners ETF (NYSE:GDX) is up 15.78% this year while SPDR Gold Trust is up by almost 10%.
The commodity itself has appreciated 7% since the start of the year after a negligible 1% return in 2022
This trend is likely to continue, with investors continuing to seek out gold as a safe haven asset as the signs are pointing to a slowing global economy - and a potential recession as a result.
For example, US ADP (NASDAQ:ADP) private payrolls report showed a 145,000 private sector hiring reality versus the 210,000 projected figure. Unemployment claims also rose, while consumer spending is weakening.
Looking ahead for gold, analysts are calling for the commodity to surpass its all-time high of $2069.40 in 2020, calling for $2,100 as a reasonable near-term future price.