As the precious metal reaches new heights, the price of a single gold bar has surpassed an astounding $1 million for the first time in history.
On the global stage, a standard gold bar weighs in at 400 ounces, according to CNN. However, not every gold bar tips the scales at exactly 400 ounces. In London, the heartbeat of the global gold trade, these bars can vary, containing anywhere from 350 to 430 ounces of pure gold. Moreover, as stated by the U.S. Gold Administration, gold bars are typically traded internationally by central banks and major dealers, rather than by individual investors.
Yet, with spot gold prices soaring past $2,500 per ounce last weekend, a single gold bar has, for the first time, breached the $1 million mark.
On August 20th, the precious metal continued its upward trajectory, at one point reaching $2,524 per ounce. This surge is driven by heightened demand for safe-haven assets ahead of a pivotal speech by U.S. Federal Reserve Chairman Jerome Powell this week. Since the start of the year, gold prices have climbed over 20%, fueled by investor expectations that the Fed will soon cut interest rates.
When interest rates drop, gold typically rises, as this precious metal doesn’t yield a fixed return. Investors also view it as a hedge against inflation, believing that gold maintains its value even as other assets depreciate.
The market’s ascent is further bolstered by central banks, with China leading the charge, actively purchasing gold to reduce their reliance on the U.S. dollar. These institutions regard gold as a reliable store of value over the long term, especially in times of economic uncertainty. In the first half of this year alone, central banks were net buyers of 483.3 tons, equivalent to 40,000 gold bars, according to data from Metals Focus, as reported by Bloomberg.
