With the US economy seemingly averted from a recession, US stock indexes including the S&P 500 are at record levels, and risky investments like Bitcoin are hitting new all-time highs. Meanwhile, gold, often seen as a hedge against losses in other markets, continues to rise in price.
Gold prices hit an all-time high of $2,195 an ounce on March 8, and are up 5% year-to-date and 19% over the past year. Meanwhile, the S&P 500 is up 8% year-to-date and 31% over the past year.
A contributing factor behind gold’s recent rally is the poor economic outlook outside of the United States. In its January 30th Quarterly World Economic Outlook, the International Monetary Fund (IMF) predicted that the U.S. economy would grow by 2.1% this year, while other developed countries such as Germany, Japan, and the United Kingdom expected growth rates of 1%. %. Meanwhile, over the past year, the stock indexes of major overseas stock exchanges have fallen far below the S&P 500, with Hong Kong’s Hang Seng Index down 18% and Britain’s FTSE 100 down 1%.
“Western investors are not behind gold’s recent rally,” said Ross Norman, chief executive officer of Metals Daily. ‘ is the cause of this increase.
Several other factors have also been blamed for the soaring price of gold in the U.S., including investors looking for ways to bet against the possibility of higher-than-expected inflation and investors repositioning their portfolios as stock prices soar. One example is the existence of a home. Additionally, some believe that investors are looking for safe-haven gold in the face of geopolitical risks such as the war between Israel and Hamas and the war between Russia and Ukraine, as well as the presidential election in November.
On the other hand, lower interest rates also make U.S. Treasuries, another safe-haven asset, less attractive. UBS Global Wealth Management’s Solita Marcelli said in a note to clients on Monday that the world’s central banks are accumulating gold at the highest level in 50 years, and that Republican presidential candidate Donald Trump is The possibility of increased tensions is also a reason to remain bullish on gold.
About half of January’s gold shipments went to Hong Kong and mainland China, UBS said.
Gold’s popularity as an investment is evidenced by its centuries-old history of maintaining its value through periods of inflation and conflict around the world. U.S. investors’ confidence in precious metals hit its highest level last year since 2012, with a Gallup poll showing Americans are more confident investing in gold than stocks. Ta.
2024-03-12 00:00:06
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