Gold’s Predicted Surge
Gold (XAU) has been on a speculative price ascent this season, currently sitting at $2,341 after rallying from its previous bull run in 2019. Experts anticipate that the central bank surge will further boost gold prices, leading to a renewed rally in XAU. The timeline for this anticipated rally is projected to kick off towards the end of 2024 and extend into 2025.
Geopolitical Factors Behind Gold’s Rise
According to a recent analysis by Xu Le from the National University of Singapore (NUS) Business School, the remarkable ascent in gold prices is expected to continue until 2025. Le attributes this meteoric rise to a shift in the geopolitical landscape, which has contributed to the strengthening of gold prices. Additionally, the surge in global bank reserves of XAU and the trend of hoarding gold are also significant factors driving this upward trajectory.
One interesting aspect to note is the changing relationship between gold prices and federal rates. Traditionally, gold has shown an inverse correlation with federal rates, meaning that as interest rates and the US dollar strengthen, gold prices tend to decline. However, in recent years, gold prices have defied this trend, holding strong and even reaching new highs despite high federal rates and a stable US dollar. This deviation from the norm has captured the attention of investors seeking to protect their wealth amidst economic uncertainty and inflationary pressures.
One key driver behind the surge in gold prices is the concept of de-dollarization, where investors are increasingly turning to gold as a safe haven to shield their assets from economic volatility. The trend of de-dollarization has gained momentum as countries diversify their currency reserves by accumulating gold and alternative currencies.
XAU Rally Until 2025
Looking ahead, Xu Le predicts that the rally in gold prices will persist until 2025, with a potential spike expected by the end of 2024. Gold, known for its role as a safe haven asset, is likely to maintain its influence and push its price higher in the latter half of 2024 and into 2025.
Notable finance analyst Rashad Hajiyev believes that the current trajectory of XAU mirrors its bullish rally phase from 2019. If history repeats itself, gold has the potential to surpass the $2500 mark, showcasing a strong upward trend in the coming months.
As investors navigate uncertain economic landscapes and seek to protect their wealth, gold continues to serve as a beacon of stability and value in times of financial turbulence.
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