Why Gold Is at Its Highest Price Ever Right Now | WSJ

Core Insights - The price of gold has reached an unprecedented level of $4,000 per troy ounce, marking a significant rally not seen since 1979 [1] - Gold futures prices have increased by approximately 50% this year, surpassing many historical crises in the U.S. [2] - Investors are turning to gold primarily for its value retention during inflationary periods and economic uncertainty [3][4] Gold Market Dynamics - The initial rise in gold prices occurred during the first part of Trump's second term, followed by a stagnation over the summer until a pivotal speech by Federal Reserve Chair Jerome Powell in August, which indicated potential interest rate cuts [5][6] - Central banks globally have been accumulating gold reserves since the financial crisis, driven by doubts about the stability of the global financial system, which is closely tied to the U.S. economy [6][7] - The U.S. dollar has experienced its weakest first half in 50 years, influenced by a lack of confidence in the U.S. economic outlook and concerns over long-term deficits [8][9] Future Considerations - Despite the current surge in gold prices, historical patterns suggest that significant price gains may not be sustainable, as seen in the aftermath of the 1979 gold boom [10] - The performance of U.S. institutions, the independence of the Federal Reserve, and potential decreases in inflation and continued economic growth could exert downward pressure on gold prices [10]