In August 2024, a standard gold bar cost $1 million for the first time. Spot gold prices—the current momentary market prices at which gold is available for immediate delivery—have risen more than 21% in 2024. The bull market in gold is generally believed to represent the desire of both individuals and financial institutions to hold a tangible, globally valued asset in times of perceived economic uncertainty.
On August 2, the price of spot gold rose to $2,500.72 per Troy ounce (a measurement slightly heavier than a regular ounce, dating back to the Middle Ages in Troyes, France). There are 400 Troy ounces (27.5 lbs.) in a typical gold bar, which explains the more than $1,000,000 bar valuation. On August 27, the price of a Troy ounce of gold reached $2,525, and on September 10, it closed at $2,516.
To get a general idea of the long-term growth of gold's value, consider that the average price of a Troy ounce in 1833 was $18.93. According to the U.S. Geological Survey, about 244,000 metric tons of gold have been discovered so far, primarily in China, Australia, and South Africa. Most fabricated gold is used for jewelry and technological products.
According to Investopedia, the popularity and cost of gold can be affected by interest rates and expectations, inflation, supply and demand, and investor sentiment and behavior in regard to risk. Gold is currently held in favor by both central banks and individual buyers.
“Gold is ‘fallback money,’” financial author John Stepek writes in an article for Bloomberg. This essentially means that gold can provide a sense of stability—a possession to “fall back” on—in seemingly volatile financial eras.
So, should every investor own gold, if they can? That’s an individual choice, but Stepek recommends it, calling it a “forever” asset and pointing out that central banks consistently own gold, regardless of market fluctuations. Since 2023, Costco members have even been able to buy 1-ounce gold bars online, with a 2-bar limit per member.
In August 2024, the price of spot gold rose to $2,500.72 per Troy ounce, equating to about $1 million per standard gold bar for the first time.
The current rise in the gold price is driven by both individuals and financial institutions, possibly in response to financial uncertainties.
Gold, the 79th element on the Periodic table, was worth $1,200 an ounce in 2019.
Costco members can buy 1-ounce gold bars online, with a 2-bar limit per member.
Photo: Costco
h/t: [CNN]
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