Gold Continues to Skyrocket! Beware of Corrections!
Gold prices have seen significant gains in recent days, moving towards $4,480 per ounce, propelling the market back to its current highs after weeks of consolidation. The ongoing gold rally is driven by various fundamental factors that are driving demand for this precious metal. This surge occurs amid geopolitical uncertainty and expectations of interest rates from the Fed.
One of the main factors supporting the gold price rally is global geopolitical tensions, particularly those involving Venezuela and US-China tensions. When political tensions escalate, investors turn to gold as a safe-haven asset, which not only maintains its value but also tends to rise when other market risks intensify. This strengthens demand for gold, pushing prices to record highs.
Conversely, expectations of lower interest rates from the Federal Reserve are further boosting gold prices. With interest rate cuts likely next year, non-interest-bearing gold is becoming an attractive option for investors, who tend to prefer precious metals over low-yielding assets. This adds to the fundamental strength behind gold's continued rise.
Institutional purchases, particularly by central banks in various countries, also strengthen gold prices. Central banks' continued additions to their gold reserves demonstrate confidence that gold will remain an effective hedge, particularly amidst the global economy. This consistent buying increases pressure on gold supply, which in turn drives prices higher.
In the domestic market, a weakening US dollar further strengthens gold's appeal. When the dollar weakens, gold prices tend to rise because the precious metal is valued in dollars. A weaker dollar driven by the Fed's more dovish monetary policy boosts gold prices, making it a more attractive investment option.
Gold price forecasts for the end of 2025 suggest that gold could reach $4,700–$4,800 per ounce. This is based on projections that global economic growth, interest rate cuts, and persistently high inflation will continue to drive demand for gold. Given this situation, many analysts believe gold prices will continue their positive trend until the end of next year.
Overall, gold prices are expected to continue strengthening, especially amid increased demand for safe-haven assets and support from global monetary policy. If global geopolitical and economic conditions remain uncertain, gold prices could reach $4,800 or more, making it one of the most profitable investments in 2025. (asd)
Source: Bloomberg.com
