Gold's Glittering Future: Decoding the Latest Price Surge

should you buy gold now, or wait for a dip?

Gold is a highly valued commodity with a multifaceted role in the global economy. It serves as a:

• Store of Value: A hedge against inflation and a safe haven asset during economic uncertainty.
• Investment Diversification: A portfolio stabilizer due to its low correlation with other assets.
• Monetary Role: Historically significant in monetary systems and held as central bank reserves.
• Industrial and Technological Uses: Essential in electronics, medical devices, and aerospace.
• Cultural and Symbolic Significance: Used in jewelry and associated with wealth and status.

Gold's importance stems from its contribution to economic stability, financial security, and technological advancement. Its diverse applications and enduring appeal ensure its continued significance as a commodity.

here are some of the most likely factors behind the recent rally:

• Geopolitical Risks: The world remains a volatile place. Ongoing conflicts, political instability, and rising tensions between nations are likely to keep investors seeking safe-haven assets like gold. Any escalation of these situations could further drive up demand and prices.
• Economic Uncertainty: Concerns about global economic growth, inflation, and potential recessions are likely to persist in 2025. Gold is often seen as a hedge against economic downturns, so continued uncertainty will likely support its price.
• Inflation Concerns: While inflation may have peaked in some regions, it's expected to remain elevated in many countries. This will continue to erode the purchasing power of currencies, making gold an attractive store of value and hedge against inflation.
• US Dollar Weakness: If the US dollar continues to weaken against other major currencies, it will make gold more affordable for holders of those currencies, increasing demand and potentially pushing prices up.
• Central Bank Buying: Central banks around the world are likely to continue diversifying their reserves by increasing their gold holdings. This trend is driven by a desire to reduce reliance on the US dollar and hedge against economic and geopolitical risks. Central bank buying adds to the overall demand for gold and supports higher prices.
• Demand and Supply Dynamics: The overall demand for gold is likely to remain strong in 2025, driven by factors such as industrial use, jewelry demand, and investment appetite.
  If supply remains constrained, this could further contribute to upward pressure on prices.

Gold futures can be seen in a bullish momentum rallying from the price of 76000 to 86000 since the beginning of 2025. We are expecting the price to take an immediate support around 85000 to 83640 range as marked in the chart for accumulation with a target price of 90217.

Sudhanshu,

A Bhilai-based Finance professional who likes intellectual conversations and spending time in nature.