Gold prices soar amid global economic uncertainty
Rising inflation and geopolitical tensions drive demand for safe-haven assets
Investors flock to gold as a store of value
The price of gold has surged in recent weeks as investors seek safe-haven assets amid rising inflation and geopolitical tensions. The spot price of gold, which is the price at which gold is traded immediately, reached an all-time high of $2,075.47 per ounce on March 8, 2022.
There are several factors driving the demand for gold. One is the rising inflation rate. Inflation erodes the purchasing power of money, making gold a more attractive investment. Gold is also seen as a hedge against geopolitical uncertainty. The ongoing war in Ukraine and the tensions between the United States and China have made investors more risk-averse, leading them to seek out safe-haven assets like gold.
The demand for gold is being driven by both retail and institutional investors. Retail investors are buying gold coins and bars, while institutional investors are buying gold ETFs and futures contracts. The World Gold Council estimates that global gold demand reached 1,174.3 tonnes in the first quarter of 2022, up 34% year-over-year.
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