Gold continues its remarkable rally, defying typical headwinds such as a rising US dollar and Treasury yields. Despite these challenges, the precious metal has gained around 4% in the past week alone, marking a third consecutive weekly spike. This surge comes amid strong economic data from the US, indicating a robust jobs market.
According to XM Australia CEO Peter McGuire, gold’s resilience can be attributed to a combination of factors, including central bank buying, geopolitical uncertainty, and Chinese demand. Central banks, particularly in China, Turkey, and India, continue to splurge on the precious metal, laying a strong foundation of support.
Geopolitical tensions, such as Israel’s strikes on the Iranian embassy and Ukraine’s attack on Russian oil infrastructures, have also contributed to the safe-haven appeal of gold. In addition, Chinese investors, faced with limited investment options, have been turning to gold as a viable alternative.
Despite expectations of delayed Fed rate cuts, gold investors remain unfazed, with the metal serving as a hedge against inflation. Looking ahead, analysts predict that the rally in gold prices is likely to continue, with potential resistance levels around $2,340 and $2,500.
However, for the outlook to change, fundamental themes such as an improvement in the Chinese economy or a resolution of geopolitical conflicts may need to occur. Overall, the consensus is that gold’s upward trajectory is set to persist for the foreseeable future, buoyed by a combination of factors that continue to support its price.
