Gold prices are hitting record highs, topping $2,100 per ounce on Monday as investors boost their holdings of the shiny metal amid as a hedge against global conflicts and expected rate cuts from the Federal Reserve.

The recent price surge in gold is "wild," although it follows two years of solid gains in gold prices, noted Peter Boockvar, chief investment officer at Bleakley Financial Group in a report. (Adjusted for inflation, gold reached its peak in 1980, when its price of $850 would translate into $3,200 in today's dollars, he noted.)

See Managing Your Money for more on gold prices:

• Will gold prices increase in 2024? Here's what the experts think
• Gold prices are climbing. Is this the right time to invest in gold?

According to Reuters, the spot price for gold touched rose as high as $2,111.39 in overseas trading on Monday. It dipped to $2,071 later in the session, up 14% for year.  By comparison, the S&P 500 has increased 21% over the same period.

Why gold is rising

Investors are snapping up gold because it is viewed as an inflation hedge and a safe haven in times of political instability, concerns of which have been sparked by Russia's war in Ukraine and the Israel-Hamas conflict. Non-U.S. investors, especially people in China, India, Indonesia and Saudi Arabia, are also more likely to buy physical gold as part of their financial diversification, noted Louis Gave of Gavekal research.

Investors in Western nations are largely spurred to buy gold by "fiscal crises, collapsing currencies, wars and geopolitical strife," he noted.

"The bottom line is that as gold breaks out to the upside, there seems to be many potential marginal buyers set up to keep chasing the price higher," Gave told investors in a research note. "Meanwhile, it is not obvious where the marginal seller will come from. This seems like a great set up for a bull market — this and the fact that absolutely no one seems to care."

At the same time, gold prices are rising due to expectations that the Federal Reserve could begin cutting rates in 2024. That could lead to a weaker U.S. dollar, making gold more attractive as an investment, experts note. The prospect of lower borrowing costs next year has also driven stocks and bitcoin prices higher in recent weeks, with investors more willing to put their money in risky assets.

It's not just individual investors who are buying gold to diversify their portfolios — central banks across the globe are also stocking up, according to Boockvar.

"According to the World Gold Council, in Q3 central banks bought 337 tons, almost double the pace of Q2 and that is the 3rd highest quarter on record," he wrote. "The acceleration in buying was certainly in part triggered by the US and EU confiscation of about half of Russia's central bank reserves."

Will gold prices keep rising?

Economists and Wall Street analysts predict that gold could move even higher, primarily due to the forecast that the Fed will begin cutting rates next year. If the central bank cuts rates by 1 percentage point over the second half of 2024, prices for the meta; could reach a new peak of $2,300 an ounce in 2025," according to JPMorgan analysts. 

• Costco is selling gold bars, and they're selling out within hours

Meanwhile, even Costco is getting into the gold business, selling 1-ounce bars to its members that often sell out within hours. But for people who want to sell their gold to lock in today's record prices, the effort can be somewhat trickier, experts note. 

There are online buyers that will pay close to the spot price for gold, while also providing insurance to protect your assets, such as The Alloy Market and Express Gold Cash, experts told CBS MoneyWatch.

Aimee Picchi

Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

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