The uncertainty over US-China trade talks, developments in the global market and talks surrounding recession are some of the key reasons that have triggered a rise in prices of gold, reported Business Today.
Gold has also got a boost as the US yield curve inversion intensified on Tuesday to levels not seen since 2007, sending jitters down US markets.
Commenting on the development, Kotak Commodities head said gold prices have entered a bull cycle, adding that spot prices may even shoot past the $1,950 per ounce level from the current level.
“Gold prices are indicating that global worries are still intact. If we compare gold with S&P and gold with bond yield, still the ratio is very low, so gold has a lot of steam left to go much higher,” he told IANS.
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Observing the current trend, it seems that the yellow metal is performing better as an investment option in comparison to mutual funds, equities, real estate, and fixed deposits.
One of the key reasons why gold prices are rising globally is the mixed signals on trade talks between the US and China. The constant change in mixed signals in the trade war narrative has sent overvalued gold prices, according to experts.
The escalating trade tension between the two largest economies in the world is likely to push up gold prices further.
The weak global economic outlook for the entire year is another reason why gold prices are surging. The yellow metal is considered as a financial instrument that does not erode in valuation during periods of economic turbulence.
Many global investors are looking for safer investment options including gold as fears over a recession continue to grow.
