Gold Prices Reach 6-Month High Amid Recession Concerns... Oil Prices Plunge Over 4%

[Asia Economy New York=Special Correspondent Joselgina] As concerns over an economic recession grow, the price of gold, a representative safe-haven asset, has reached its highest level in six months. There are also expectations that the gold price rally throughout this year will break the all-time record.

[Image source=Reuters Yonhap News]

On the 3rd (local time), February delivery gold on the New York Mercantile Exchange closed at $1,846.10 per ounce, up 1.1% ($19.90) from the previous trading day. This is the highest closing price in over six months since June 16 of last year.

The price of gold began to rise from early November last year as concerns over an economic recession intensified and financial markets remained sluggish. Additionally, central banks around the world have supported the upward trend in gold prices by purchasing gold on an unprecedented scale as part of their 'de-dollarization' strategies.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said, "Concerns about recession, valuation risks in the stock market, a weak dollar outlook, inflation worries, and expectations that central banks’ interest rates will peak are all intertwined," and predicted that this gold price rally will continue.

The economic media CNBC emphasized that "most forecasts for the global market this year depend on the trajectory of central banks' monetary policies amid recession concerns," and that the gold price rally is no exception. In particular, whether central banks, including the U.S. Federal Reserve (Fed), will pivot (change direction) is expected to have a significant impact on gold prices.

There are also predictions that gold prices will hit an all-time high this year, with expectations of at least a 20% increase.

Eric Strand, who manages the AuAg ESG Gold Mining Exchange-Traded Fund (ETF), predicted that gold prices will break the all-time high this year and surpass $2,100 per ounce, opening a "new long-term bull market." Strand added, "Our view is that central banks will shift from raising interest rates to a dovish stance (favoring monetary easing), which will trigger explosive movements in gold prices for several years."

Earlier, J?rg Kiener, Chief Investment Officer (CIO) of Swiss Asia Capital, who appeared on CNBC, also forecasted, "I believe we are seeing movements that will set new record highs."

On the other hand, international oil prices have plunged since the beginning of the new year due to recession concerns. On the same day, February delivery West Texas Intermediate (WTI) crude oil on the New York Mercantile Exchange (NYMEX) closed at $76.93 per barrel, down 4.2% ($3.33). This is the lowest closing price since December 20 of last year. Brent crude for March delivery on the London ICE Futures Exchange also recorded a decline of over 4%.