Gold Is on Fire, Not Due to FOMO Buying!
Global gold prices have again reached a new record high after a strong boost from a combination of monetary and geopolitical factors, as well as a surge in physical demand. This movement confirms gold's position as one of the most sought-after assets amidst increasing global uncertainty.
One of the main drivers of gold's rise is expectations of an interest rate cut by the Federal Reserve. United States economic data shows inflation is starting to level off while economic growth is slowing, fueling speculation that the central bank will soon shift to a looser monetary policy. This condition has caused bond yields to fall and the US dollar to weaken, prompting investors to turn to gold.
In addition to monetary factors, ongoing geopolitical tensions in the Ukraine-Russia, Taiwan-China, and the Middle East have further strengthened demand for gold as a hedge. Fund inflows into gold-based ETFs have also increased, indicating that institutional investors are starting to increase their exposure to the precious metal.
Meanwhile, physical demand from major consumer countries such as India and China continues to show a positive trend. In fact, several central banks in developing countries are actively increasing their gold reserves as a form of diversification from the US dollar. This fundamental support has fueled the gold rally, pushing prices to historic highs. With the combination of a weakening dollar, more accommodative monetary policy, and unabated geopolitical tensions, analysts believe gold's momentum has the potential to continue. If the Federal Reserve gives a clear signal about cutting interest rates, gold has the potential to continue its rally and renew its record in the near future.
Technically, gold prices are currently testing key resistance at USD 3,550. If this level is successfully broken, gold has the potential to continue its rally towards USD 3,580 to USD 3,600 per troy ounce. Meanwhile, the nearest support is around USD 3,520, and if this level is broken, a healthy correction towards USD 3,500–3,470 is possible before resuming the uptrend.
Source: Newsmaker.id
