Gold Prices are at the Peak! Dollar or Gold?
While investors choose between the dollar and gold, the acceleration of gold purchases by the Central Bank of China and the rise in inflation in the USA support gold prices.
Central banks are also trying to protect against foreign policy risks by increasing their gold reserves.
In the long term, gold is expected to target the $2,550 level.
Analysts predict that gold will continue to be an attractive investment tool for investors.
Gold, which has reached its highest price of all time by exceeding the level of 2,400 dollars per ounce in recent weeks, has literally affected global markets. China, the world’s largest gold producer and consumer, was also at the center of this extraordinary rise.
So, what makes gold so attractive?
Tension in the Middle East: Tension in the region directs investors to safe havens such as gold.
War in Ukraine: The continuation of the war and increasing uncertainty increases the demand for gold.
Nuclear war concern: The increasing risk of a nuclear war on a global scale makes investment in gold attractive.
FED’s reluctance to reduce interest rates: FED’s reluctance to reduce interest rates directs investors to gold.
Increasing interest in precious metals: The recent increase in tension between Israel and Iran has increased the interest in precious metals.
Gold purchasing policy of central banks: Central banks’ focus on bullion (physical) as a store of value in uncertain times increases the demand for gold.
China’s gold purchasing policy:
The Central Bank of China has entered its longest purchasing period in order to diversify the dollar that has been in its reserves for the last 17 months and to protect against the depreciation of its currency, the Yuan. This is an important factor that pushes gold prices up.
Inflation and real interest income:
Rising inflation and decreasing real interest income in the USA also increase the demand for gold.
Foreign policy risks and sanctions: Central banks are increasing their physical gold reserves due to concerns about foreign policy risks and the potential for sanctions that could affect foreign assets.
When will gold prices fall?
Analysts state that although the expectation that the tension between Israel and Iran will not escalate has become generally accepted, gold will continue to be “active” as inflation remains rigid and real interest income in the USA decreases. From a technical perspective that has been followed for a long time, the $ 2,550 level is expected to be targeted.
