The Australian gold price has kicked higher in response to the Reserve Bank of Australia’s (RBA) decision to cut interest rates to a record low of one per cent.
After dropping back below the $2000 an ounce mark on July 2, the price jumped overnight to $2043 an ounce, according to ABC Bullion.
This can largely be attributed to the RBA cutting interest rates for the second time in the past two months to kick start the Australia economy.
The resurgence follows the precious metal reaching an all-time high last week of $2058, as it continues an upward trajectory in response to increased global uncertainty.
Gold prices have notoriously escalated due to financial instability with the previous record dating back to September 2011 where it reached $1895 at the height of the global financial crisis.
Senior analyst at IBISWorld, Jason Aravanis, said the gold price could continue to rise with the anticipation of more interest rate cuts.
“We’re seeing the Australian dollar decline over time because of gradually worsening economic data, despite benefiting off really high iron ore prices,” he said.
“The Reserve Bank has cut interest rates already, all that rhetoric makes investors afraid of losing real wealth to inflation if they hold investment assets.”
Gold is often viewed as a safe haven given its price increases in response to events that cause the value of paper investments, such as stocks and bonds to decline.