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Gold Prices at Almost Record Highs.

On Tuesday, gold prices surged towards record highs, and experts predict that the trend may continue. Currently trading at $2,042 per ounce, gold prices need to increase by less than 1.5% to surpass the record high of $2,069.40, set in 2020. Over the past month, gold prices have increased by 12%, and from its recent low in November, the precious metal has grown by 25%. Typically, gold prices are influenced by three primary factors, including a decline in the US dollar value, lower bond yields, and an increase in risk aversion. Gold has seen a recent surge due to a collapse in bond yields and growing expectations of a recession in the US, perhaps as soon as this year, amid turmoil in the banking sector. Additionally, the prospect of a looming debt-ceiling fight has pushed investors towards gold exposure as a safe investment. The rise in gold prices is above a significant psychological threshold of $2,000, which could lead to an increase in gold-mining stocks. Companies such as Newmont and VanEck Gold Miners have seen substantial increases in share prices. However, gold-mining stocks tend to be more volatile than the underlying commodity due to the disproportionate impact of changes in gold prices on miners' profits. Nonetheless, a higher gold price can offset the increased expenses miners face for labor, diesel fuel, and raw materials used in mining and processing gold. As gold prices are expected to continue to rise, it is predicted that gold-mining stocks will lead the way.

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