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This milestone, driven by strong demand from central banks and expectations of US Federal Reserve rate cuts, underscores gold’s growing appeal as a safe-haven asset amidst economic uncertainty read more
 "Gold bar price crosses $1 million mark for the first time ever! What's behind the rally?")
For the first time ever, the price of one gold bar has crossed the million-dollar mark. Reuters
For the first time in history, the value of a single gold bar surpassed $1 million, as gold’s spot price climbed above $2,500 per troy ounce– or roughly 0.02 kilograms– on Friday (August 16).
This unprecedented milestone was achieved when the precious metal hit an all-time high, driven by a variety of economic factors and market speculation, Bloomberg reported.
With standard gold bars typically weighing around 400 troy ounces (approximately 11.4 kgs), the price surge has pushed the value of each bar beyond the million-dollar mark.
Factors behind the surge
Multiple factors have contributed to gold’s meteoric rise. Central banks around the world have significantly increased their gold purchases, with net acquisitions in the first half of the year reaching 483.3 tons, or roughly 40,000 bars, according to Bloomberg’s calculations based on data from Metals Focus.
This strong demand has been a key driver of the price rally. Additionally, investor expectations of looser monetary policy from the United States Federal Reserve have played a crucial role.
Speculation that the Fed will cut interest rates has weakened the dollar, making gold more attractive as a safe-haven asset.
When the Fed cuts interest rates, the return on investments like US Treasury bonds decreases. This makes dollar-denominated assets less attractive to investors compared to assets in currencies with higher interest rates.
Gold is often seen as a hedge against inflation and currency depreciation. When the dollar weakens, the price of gold in dollar terms typically rises, making it more attractive to investors seeking to preserve their wealth.
Market implications and future outlook
The rally in gold has broader implications for global markets, particularly in light of currency movements. The Japanese yen, for example, has gained ground against both the dollar and the euro as traders anticipate further action from the Bank of Japan.
With gold prices now at unprecedented levels, the precious metal’s allure as a hedge against economic uncertainty remains strong, potentially signaling further gains ahead.
With inputs from Reuters
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English (US) ·