As a safe haven and a hedge against political and economic instability, gold is expected to see a surge in demand due to ongoing political tensions in the Middle East, sustained buying by central banks, and a declining dollar value.
This year, gold has gained about 12% as investors have navigated a climate of high inflation and uncertainty over when the US Federal Reserve will cut interest rates. This tenacity emphasizes gold’s timeless allure as a safeguard against unstable economies.
According to Alex Ebkarian, COO and co-founder of Allegiance Gold, a combination of geopolitical and economic concerns, such as persistent geopolitical tensions, declining dollar value, and rising inflation, caused gold to surge above all-time highs.
Central banks are purchasing gold at an ever-increasing rate each month, driven by the BRICS Plus countries. Compared to US Treasury bonds, central banks are investing more in gold, according to Ebkarian.
According to precious metals analysts, the US economy, changes in Federal Reserve policy, and world geopolitical events can drastically affect the price of gold in short to medium term. As a result, the gold market is still vulnerable to these factors.
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