The price of gold has retreated from its record high as the U.S. dollar strengthens to begin the New Year.
The spot price of gold has declined 1.3% to trade at $2,032.82 U.S. per ounce to begin the new trading year, dropping from a record high of $2,110.80 U.S. reached in December.
The pullback comes as the U.S. dollar rallies, supported by higher bond yields.
Still, the outlook for gold in the year ahead remains positive amid expectations that the U.S. Federal Reserve will cut interest rates multiple times in the coming months.
For all of 2023, the price of gold rose 13%, marking its first annual increase since 2020 when investors flooded into the precious metal as the Covid-19 pandemic took hold.
Many analysts and traders are forecasting that gold will reach new record highs in 2024 as interest rates move lower and tensions escalate in the Middle East.
Gold is viewed as a “safe haven” asset and its price tends to rise in times of economic and geopolitical uncertainty.
Upcoming data on the U.S. labour force that is expected to be released on Jan. 5 could also influence the spot price of gold, say analysts.
