Between the country's central bank and the Chinese public, China takes up over two-thirds of all the annual production. They are the new marginal buyer. That's where the gold price is set.
A coordinated move of creating a collective new currency backed by gold by the BRICS Plus against the U.S. dollar could lead to dire financial results globally.
Gold prices have been hitting new highs, and the rally is far from over. Several factors contribute to this surge:
Interest Rate Expectations: Growing expectations of US interest rate cuts have driven investors toward gold as a safe-haven asset12. Central Bank Buying: Central banks and Chinese investors have been buying gold in significant quantities, further boosting its price3. Geopolitical Tensions: Investors view gold as a hedge against global conflicts, and the current geopolitical landscape has fueled demand4. Federal Reserve Rate Cuts: Anticipated rate cuts by the Federal Reserve have also played a role in driving gold prices to record levels4. In summary, a combination of economic factors, investor sentiment, and central bank actions has propelled gold to its all-time highs.
A pair of Federal Reserve policymakers said it would be “reasonable” to cut US interest rates three times this year, even as stronger recent economic data has sown investor doubts about that outcome.
Cleveland Fed Loretta Mester said that she doesn’t have enough information for a May meeting cut, yet foresees three rate cuts in 2024. Mester added the Fed’s challenge would be balancing the risks between inflation and employment.
San Francisco Fed President Mary Daly said the Fed need to see how long to keep rates at current levels. She supports three rate cuts, but added that it’s a projection, not a promise.
President Joe Biden held a phone call with the Chinese leader Xi Jinping on Tuesday morning in the latest effort to drive down tensions between the world's two most powerful nations. ... highest global political tension in the world ? Buy some gold now to protect and preserve our wealth ?
Sentiment and herd mentality are crucial factors in the current rally, particularly during the spring season when optimism and exuberance tend to increase.
The blistering rally of gold, whose price jumped 11.5 per cent year-to-date till April 3, may have further room to run in the medium term, according to OCBC foreign exchange strategist Christopher Wong.
OCBC kept its bullish outlook on gold prices, on the back of expectations of global easing outlook, central banks' continued purchases of gold, as well as a play up of gold's geopolitical hedge characteristic.
"Historical evidence since 2001 showed that gold strengthened when the US Federal Reserve (Fed) rate hike cycle ended and continued to extend its bullish run when Fed rate cut cycle gets underway.
In the developed markets (DM), the Swiss National Bank (SNB) became the first central bank to cut rates in March while most major DM central banks including the European Central Bank (ECB), Bank of England (BoE), Bank of Canada and the Fed are likely to cut policy rates in due course as inflation has peaked and looks on track to return to target.
If you've been considering a gold investment, it makes sense to add some of the precious metal to your portfolio now. After all, gold offers a number of unique benefits to investors, many of which are incredibly relevant in today's economic environment.
By investing in gold now, you're making a strategic move to safeguard your assets against the erosive effects of inflation while working toward long-term wealth preservation.
Nine experts, or 75%, expected to see gold prices climb even higher next week, while only one analyst, representing a paltry 8%, predicted a price decline. The remaining two experts, or 17%, said headwinds and tailwinds were too close to call next week.
Those 5 reasons are the bets of the US Fed rate cut, rising geo-political risk, aggressive buying by China, uncertainties ahead of general elections in major economies, and depreciating all fiat currencies.
The People's Bank of China has been adding to its gold reserves for the past 16 months in a row, according to the World Gold Council. In 2023, the PBC bought more gold than all other central banks.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
ahbah
6,238 posts
Posted by ahbah > 2024-04-02 20:48 | Report Abuse
Gold is not expensive. The truth is that the U.S. dollar is cheap as the US government floods the global economy with it.