Escalating U.S. Fiscal Concerns to Lend Support to Gold Prices
Meanwhile, WGC ruled out the possibilities of a full-blown crisis at the moment.
SEATTLE (Scrap Monster): According to the World Gold Council, the continuous budgetary worries in the United States are probably going to cause volatility in the bond market, which might help the gold market. A reallocation of global money as a result of economic uncertainty has caused the dollar to weaken and the price of gold to rise. Consequently, investors have been looking for safe-haven assets other than U.S. Treasuries.
More broadly, one of the things that has helped the gold market has been fiscal concerns. Any rise in financial worries has caused investors to seek for gold's relative safety, which has raised the metal's price. According to the WGC study, US fiscal difficulties are anticipated to continue to boost the gold market.
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WGC, meanwhile, denied that there was currently a chance for a full-scale crisis. There is no immediate cause for this kind of circumstance. But it predicts the likelihood of a string of rolling mini-crises. The gold market will probably receive more support as a result of the developing uncertainty and the ensuing market turbulence.
Additionally, a major factor in gold's growth since 2022 has been the increase of central bank gold purchases. According to the paper, a number of factors, including portfolio diversification and gold's ability to withstand crises, have led to central banks around the world purchasing gold.