NEW DELHI: Gold prices have been witnessing a steady rise in recent times, driven by a mix of global economic uncertainty, inflation concerns and strong demand from central banks and investors.
One of the primary reasons behind the surge is gold’s status as a safe haven asset. During periods of geopolitical tensions or financial instability, investors tend to shift their funds from riskier assets like equities to gold, boosting its demand and price.
Inflation is another major factor supporting the rally. As the cost of living rises, gold is often seen as a hedge against declining currency value, prompting higher buying interest across markets.
Central bank policies also play a crucial role. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive. Additionally, many central banks have been increasing their gold reserves, further supporting prices.
Currency movements, especially a weaker US dollar, have also contributed to the uptrend. Since gold is globally traded in dollars, a weaker dollar makes it cheaper for other countries, increasing demand.
Rising global demand for jewellery and investment, particularly from countries like India and China, has further strengthened the price momentum.
Analysts believe that gold prices may remain elevated in the near term if geopolitical tensions persist and inflationary pressures continue.