A gold bar is now worth $1 million

The price of a bar of gold is worth a million dollars for the first time, thanks to soaring prices for the precious metal.

The price of spot gold reached more than $2,500 per troy ounce Friday, hitting a record high. The average gold bar weighs 400 troy ounces - which, when you do the math, hits a million dollars.

Bloomberg News first reported the gold bar price.

Spot gold prices have shot up more than 20% year to date. Higher gold prices can be a sign that investors expect the Federal Reserve to cut its benchmark interest rate soon. Central banks led by China are also buying up gold to ease reliance on US dollars.

Central banks - and investors - see the precious metal as a long-term, reliable store of value during periods of economic turmoil. That's because when interest rates fall, gold prices tend to rise, as bullion becomes more appealing than bonds.

Investors also regard gold as a hedge against inflation, betting bullion will retain its value when prices rise.

Of course, not every gold bar weighs exactly 400 ounces. And the United States Gold Bureau said that gold bars are usually traded internationally by central banks and bullion dealers, not by individual people.

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