What’s Behind The Rise In Gold Prices?
gold prices are still glittering for investors fueling the precious metals Advance dollarization efforts by global central banks and foreign Nations geopolitical uncertainty amid ongoing conflicts in the Middle East and Ukraine and investors betting rate Cuts will boost Gold’s attractiveness the Federal Reserve is trying to fight inflation but in an environment where they’re considering to lower the interest rates then gold becomes a lot more attractive in comparison to the alternative bonds which would be yielding a lower return the precious metal is also considered a hedge against uncertainty for many investors demand has sent gold prices soaring roughly 133% this year topping $2,413 per troy ounce in late April but after an astounding Advance this spring can the precious metal continue its win streak with investors retail investors have been paying more more attention to Gold because of its perception as a potential Safe Haven during rough markets but the recent rise of gold has seen much of its growth from larger investors from money managers to central banks worldwide the central banks are improving the overall quality of their reserves specifically you have the bricks Nation led by uh China and Russia and what we’ve noticed in the last uh few years is that they started diminishing buying US Treasury bonds and in return they’ve been buying more of the physical gold this is their way to vote against the US dollar that’s Alex EPC caran the co-founder of Allegiance gold a gold investment manager that specializes in Gold ETFs he says central banks are rapidly buying gold to wean themselves off the US dollar as a reserve currency also driving this dollarization hopes by some nations of avoiding Financial sanctions imposed by the US One recent example since the beginning of the Russia Ukraine war the US has sought to punish Russia for its Invasion with economic restrictions wielding the US Dollar’s function as the world’s Reserve currency to restrict Russia’s assets EP caran says this has pushed countries like Russia and China to seek Reserve assets that aren’t necessarily controlled by any individual country what we’ve noticed that the entire infrastructure from the Swift banking system what happened was they realized the world realized that we can actually trade without depending on the US dollar and this is where the second largest economy in the world is actually benefiting and that is China tensions in the Middle East are also pushing investors to Safe Haven assets some investors see gold as a store of value for its relative liquidity and utility especially as fears over a large scale war in the Middle East still Loom gold Futures spiked to an all-time high in April after tensions between Israel and Iran escalated but what will it take for gold to lose its shock sh with investors in a research note Goldman Sachs analysts say gold tends to be less attractive to investors when interest rates are higher the precious metal doesn’t offer yield compared to bonds which become more attractive when rates are high but for now UBS says Pure fomo or the fear of missing out is still firmly in the driver’s seed for Gold investors hoping to catch the tail end of the Gold Rush could boost prices to the bank’s new Target of $2,400 per ounce you BS does say it thinks the gold rally could pause to catch its breath in the near term for Investors Business Daily this is Mike trong
Gold prices have surged since the beginning of the year, fueled not just by conflict and market insecurities, but purchases from some unexpectedly large players. Alex Ebkarian, co-founder of Allegiance Gold, explains.
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