July 16, 2024

High inflation, the risk of stagflation and rising geopolitical tensions suggest that the stage is set for gold prices to rise in the future. What is the future of gold? Here are 3 trends that will shine with yellow metal in the near future.

Gold was already on the rise due to the Covid-19 pandemic and the conflict in Ukraine created new investor interest in the yellow metal. There are currently three main trends affecting the price of gold

1. Stagflation

Following Russia’s invasion of Ukraine, fuel, energy and commodity prices in the US and Europe rose to record levels, affecting consumer confidence and retail sales.

In addition, the Covid pandemic is undermining the economy’s ability to produce products and services at a given price, further increasing inflation and hindering growth. 

History has shown that gold performs better than other asset classes in times of stagflation.

And in today’s market environment, there are many factors that suggest gold could benefit from a new phase of stagflation. 

2. Growing demand

    After the Covid-19 pandemic and the Russian invasion of Ukraine, investors were crazy about the safety of gold, pushing its price to new records.

    Investor demand for gold is increasing due to geopolitical tensions and market volatility. This increased demand comes after a solid year of physical gold purchases. 

    Central banks are also adding gold to their reserves as a hedge against increasing geopolitical and economic shocks. Overall, central banks bought 19.4 tonnes of gold in April, more than double the previous quarter, and will remain net buyers in 2022.

    Increased investor interest is likely to drive the price of gold higher: as it did after Russia’s invasion of Ukraine in early February, when gold prices soon hit record highs and gold sellers sell double or triple what they’re used to. You can follow the example of central banks and buy gold online now to protect yourself during stagflation: it will help guarantee your financial security and protect you in case of emergency. It may not solve your immediate financial problems, but it will give you a plan of action if you’re dealing with a booming economy and rising interest rates.

    3. Geopolitical crisis

      In times of war, the fear factor always made investors move their capital away from risky assets and countries and buy gold online as a long-term safe investment.

      The war in Ukraine has damaged global markets, driving up commodity and energy prices, closing markets and shifting funds, all of which have sent investors scrambling to protect assets like gold, silver, platinum and other precious metals.

      And with other potential geopolitical turmoil (conflict between Russia and Ukraine, Russia and the European Union or tensions surrounding China and Taiwan), gold is likely to play an important role. What is the end result?

      Or someone who may not be sure what the price of gold will be in the future. Without crystal balls, we could only follow these trends. So, in the long run, it is better to buy gold than to hope that the world will suddenly become a better place overnight.