International Gold Prices Surpass $2,000 Amidst Economic Uncertainty
*Yahoo News*
(New York, March 8, 2023) – International gold prices have breached the $2,000 per ounce mark, reaching their highest level in over nine months, fueled by global economic uncertainty and geopolitical tensions.
Gold, a traditional safe-haven asset, has surged in value as investors seek protection from market volatility and potential inflation. The ongoing conflict in Ukraine, rising interest rates, and fears of an economic recession have contributed to the recent surge in demand for the precious metal.
“Gold is benefiting from its status as a classic safe-haven asset during periods of geopolitical and economic uncertainty,” said James Anderson, chief investment officer at Aberdeen Standard Investments. “Investors are flocking to the metal as a way to diversify their portfolios and hedge against potential risks.”
The price of gold has been steadily climbing in recent weeks, buoyed by strong demand from central banks, institutional investors, and retail buyers. Central banks, in particular, have been accumulating gold reserves as a hedge against potential currency fluctuations and inflation.
According to the World Gold Council, global gold demand reached a record high of 4,758 tons in the fourth quarter of 2022, primarily driven by central bank purchases.
“Central banks are buying gold at a record pace, which is a clear indication of their concerns about the global economic outlook,” said David Rosenberg, chief economist at Rosenberg Research. “Gold is seen as a safe-haven asset that can protect against inflation and geopolitical risks.”
The rise in gold prices has also been supported by economic headwinds, including rising inflation and the potential for an economic slowdown. Investors are concerned that persistent inflation could erode the value of their investments, making gold an attractive alternative.
“Investors are worried about the potential for a recession, which could lead to a sharp decline in the stock market and other risky assets,” said Jeffrey Currie, global head of commodities research at Goldman Sachs. “Gold is a good way to diversify portfolios and protect against downside risks.”
Analysts believe that gold prices could continue to rise in the near term, as geopolitical tensions persist and economic uncertainty remains elevated. However, they also caution that the metal is subject to volatility and could experience price fluctuations in the long run.
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