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The price of gold continues to rise. Currently, gold is trading around $2,730 per ounce. This increase is driven by various factors, including geopolitical tensions, economic uncertainties, and inflation concerns.
Today, October 23, 2024, the price of gold reached $2,735.53 per ounce after hitting a record high of $2,740.37 per ounce on October 21, marking a 40% increase compared to the same period last year.
This significant increase has been influenced by various economic and geopolitical factors.
The rise in global inflation has driven many investors to seek refuge in tangible assets like gold.
Gold is traditionally seen as a hedge against inflation, as its value tends to rise when the purchasing power of currencies decreases.
Additionally, during this period, central banks in various countries have increased their gold reserves.
This rise in demand has helped push prices higher.
Geopolitical tensions, such as conflicts in the Middle East and tensions between major powers like the United States and China, have also increased global economic uncertainty, reinforcing the belief that in times of uncertainty, gold is often considered a safe-haven asset.
The rise, explains the Financial Times, is linked to the traditional safe-haven function of the precious metal.
Furthermore, financial market instability, with sudden fluctuations in stock markets and concerns about a potential global recession, has led investors to diversify their portfolios by including gold.
Finally, protectionism is perceived as another threat: according to the World Trade Organization, since 2020, an average of only five trade agreements have been signed per year, while in 2023, governments imposed more than three thousand tariffs, five times more than in 2015.
The rise in gold prices has several implications for the global economy.
On one hand, it may indicate a lack of confidence in fiat currencies and traditional financial markets.
On the other hand, it can represent an opportunity for investors to protect their capital in times of uncertainty.
Some experts predict that in 2025, the price of gold could even surpass the $3,000 per ounce barrier.
The latest forecasts from the International Monetary Fund (IMF), adds the French newspaper Le Monde, speak of a slowdown in the global economy, although the institution led by Kristalina Georgieva believes it will be a “soft landing,” considering that the inflation of recent years has been curbed without causing severe recessions.
At the same time, however, the IMF highlights the risks associated with the fact that several engines of global growth are stalling, starting with China, which is still grappling with the effects of the real estate sector collapse.
