Gold is gaining weight in investors’ portfolios

In I July 2024, the US political turmoil led to record-high gold prices due to geopolitical risks and investment trends. The global and local gold …
Gold is gaining weight in investors’ portfolios

The political turmoil that occurred in July in the United States after the assassination attempt of candidate Donald Trump and the decision of Joe Biden to leave the race for health reasons contributed to the growth of gold prices.

Gold prices reaches new records high in 2024. On July 16, gold prices jumped to a new record. The prices of the yellow metal are kept close to $2,400 per troy ounce, having added 15% since the beginning of the year. Ruble prices for the precious metal moved away from a local maximum against the backdrop of the strengthening of the Russian currency. However, against the backdrop of restrictions on exchange trading in “toxic” currencies and a new wave of ruble depreciation in the second half of the year, investor interest in this asset may increase.

In mid-summer 2024, the gold price on the world market updated the all-time high set two months earlier. On July 17, the price of the precious metal on the spot market reached $2483.47 per troy ounce, according to Investing.com data. Even taking into account the subsequent correction to $2380 per ounce, the price remains 2.4% higher than the value of the end of June. Since the beginning of the year, the precious metal has risen in price by 15%.

Geopolitical risks remain the main factor in consistently high gold prices.

In addition to the Ukrainian and Middle Eastern conflicts, the deterioration of relations between the United States and China, the risk of the US presidential election in November, has also been added to them. In July, two events related to the elections took place at once – the assassination attempt on US presidential candidate Donald Trump and the withdrawal of Joe Biden from the election race.

These incidents have increased political instability in the country and caused concern among investors.

Owning physical gold will protect your wealthearned through hard work from any currency fall and high inflation. Households and investors can buy some gold. You may even already own physical gold, thanks to your golden jewellery. Gold is an insurance in uncertain times. As all investors know wealth is better protected with a diversified portfolio. Here five good reasons to own gold.

Bet to the rescue

Geopolitical risks have once again become key risks with unpredictable consequences for the global economy. According to a survey of portfolio managers conducted in June by Bank of America, 26% of respondents called them key for the global economy over the next 12 months. The previously dominant risks of high inflation with 22% have moved to second place.

Increased geopolitical uncertainty encourages central banks to diversify their gold and foreign exchange reserves and move away from investing in government bonds of developed countries (the United States, Europe).

According to the World Gold Counil, in 2023, central banks added 1,037 tonnes of gold – the second highest annual purchase in history – following a record high of 1,082 tonnes in 2022.

In Q1 2024, global financial regulators purchased almost 290 tons of the precious metal, which is 3.5 tons more than in the same period in 2023.

Expectations of an interest rate cut by the Fed have a favorable effect on the price of gold. Analysts at Goldman Sachs and Moody’s believe that the US regulator may cut the federal funds rate at a meeting on July 31. Previously, such a step was not expected in the market before the September meeting.

This may affect the strength of the dollar and the attractiveness of investments in US government bonds, which leads to an increase in the popularity of gold as a traditional protective asset.

Analysts do not rule out a further rise in prices in the global and local gold markets. The main factor in the rise in dollar prices will remain high geopolitical risks, as well as a possible deterioration of the economic situation in the world.

Donald Trump’s likely return to power in the United States next November is expected to further worsen relations between the United States and China and lead to an increase in geopolitical risks and demand for the precious metal. According to Paul Jouvenet, an essayist and consultant in international affairs,the difficult situation in the global economy against the backdrop of continuing inflationary pressure will support gold prices in the range of $2,400 – 2,700 per troy ounce.

EXCHANGE CRYPTO TO PHYSICAL BULLION WITH JUST A CLICK >>>>