Gold prices have sparked phenomenally over the past few years. With 24K gold now surpassing Rs.12,000 per gram in India along with the global prices striking $3,900 per ounce, speculations have arisen if this gold climb is a temporary spear or the start of a continued rally, similar to the persistent price hikes seen in oil.
Gold and Oil: A Parallel in Volatility
Oil prices have historically spiked because of several geopolitical disruptions, irregularities in trade and businesses, and variations in demand.
Similarly, the current drift in gold prices reflects fluctuations, where global uncertainty, including fears over a potential shutdown of US government, conflicts between Russia and Ukraine, and a weakening US dollar, has pushed investors to try to find safe-haven assets like gold.
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Just as oil prices climbed over a period of uncertainty, gold’s rise is powered by fears of economic instability and inflation.
What’s Driving Gold’s Price Record Highs?
Quite a lot of factors are pushing gold to new heights. Current uncertainties in global economic conditions, such as fears of a recession in the US along with the substantial interest rate cuts by the Federal Reserve, make gold an attractive substitute to traditional investors.
Moreover, with Diwali approaching, festive demand in India has additionally fueled the rally. Investors are now turning to gold for protection, globally. It is much like how oil prices increase during geopolitical troubles or OPEC announcements.
Can Gold Price Maintain Its Momentum?
Gold, therefore, could follow a similar trajectory to oil, with short-term modifications but long-term rising momentum. Though, unlike oil, gold is less likely to gets affected due to disruptions in supply chain. It is conventionally a reliable hedge against inflation and economic tremors.
However, the key for the investors is to buy gold strategically. Gradual purchases in the form of coins, jewellery, or digital gold may be a wise tactic rather than trying to time the market. Gold remains a consistent and reliable asset in the investment portfolio, and its high prices now, reflect its continuing role as a safe-haven investment.
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Ankur Mishra is a journalist who covers an extensive range of news, from business, stock markets, IPOs to geopolitics, world affairs, international crises, and general news. With over a decade of experience in the business domain, Ankur has been associated with some of the reputed media brands. Through a sharp eye on global marketplaces along with deep insights and analysis of business strategies, Ankur brings simplicity to the complex economic matrix to decode market trends and empower people.
He is committed to entrenched data, facts, research, solutions, and a dedication to value-based journalism. He has covered trade tariff wars, international alliances, corporate policies, government initiatives, regulatory developments, along with micro- and macroeconomic shifts impacting global fiscal dynamics.
