Gold is considered a friend of the global crisis. When fear increases in the market, when the economy becomes uncertain, when investors look for a safe haven, then the shine of gold price starts to increase. A similar situation is now seen in the global market.
Current gold price in the global market
The gold price is now rising again in the global market. 24-karat gold has reached $ 1,320 per 10 grams. The price of gold has increased by $ 30 per gram compared to the previous day. The price of silver has also increased. 10 grams of silver has reached $ 59.43.
Why is gold price rising so rapidly?
Now the question is why is gold price rising so rapidly? Will this growth trend continue or can a major correction come to the market now. To find the answer, we need to understand the international market situation. One of the main reasons for the strength of gold in the global market is economic uncertainty.
Economic uncertainty
Inflation control, economic growth and fundamentals are still challenging in the world’s major economies. Investors are avoiding risk and are being attracted to safe assets. In such a situation, gold has become one of the oldest safe options.
US interest rates
The second important reason is US interest rates. The policy of the US Federal Reserve Bank is currently at the center of the world market. If the signal of a decrease in interest rates becomes strong, the dollar may weaken. When the dollar weakens, the demand for gold generally increases. Therefore, investors are constantly watching the US monetary policy data and the Fed’s upcoming decisions.
Gold purchases by central banks
Now another important aspect, gold purchases by central banks In recent years, many central banks around the world have been increasing their gold reserves. This gives a clear signal. The world’s largest financial institutions have also started to see gold as an important asset for future risk management.
Gold’s price journey in the coming days
But the biggest question now is what will be the journey of gold in the coming days? When analyzing the market, there are currently two possibilities. If global tensions continue to increase, interest rate expectations strengthen and the dollar weakens, gold price can still test new heights.
But there is another side. After the price of gold has risen sharply in a short period of time, some investors may lock in profits. In that case, there is a possibility that the price will fall or stabilize for a while. That is, even though the long-term basis of gold is strong, the short-term journey is not always in the same direction.
How does gold affect the world market?
Now how does it affect the world market? The price of gold in the world market is determined by the exchange rate of the US dollar as well as the international market. Even if the price of gold is stable in the international market, if the dollar appreciates, the price of gold in the world market may increase. Therefore, three things should be paid special attention to when looking at the price of gold.
Federal Reserve Bank’s interest rate policy
The Fed’s interest rate policy is a policy of raising or lowering interest rates to keep the US economy balanced. If inflation increases, interest rates are raised, and if the economy slows, interest rates are lowered. This is why investors, banks, and governments around the world view the Fed’s decisions with great importance.
US Dollar Situation
There is often an inverse relationship between the US dollar and the price of gold. That is, in many cases, when the dollar is strong, the price of gold tends to fall, and when the dollar is weak, the price of gold tends to rise.
Global political and economic risks
The greater the global political and economic risks, the greater the possibility of gold demand and price increases. Therefore, the gold market is one of the major markets that is directly affected by world events. Because gold is considered a safe investment.
Current market signals show that gold is still in a strong area. However, a general correction after a rapid increase cannot be ruled out. The next journey of gold will now be determined not only by market demand, but also by major decisions of the global economy. Therefore, the main message for investors now is that decisions should be made based on analysis, not on enthusiasm.