📈 Gold once again confirms its status as a “safe haven” for investors!
In early April 2024, gold prices rose significantly, reinforcing the reputation of the precious metal as a reliable hedge against inflation. This increase was driven by a combination of factors, including geopolitical tensions, active central bank purchases, and capital outflows from gold ETFs.
💡 What’s happening in the gold market?
Despite the outflow of funds from ETFs, central banks continue to buy gold at unprecedented prices, raising questions about the real driving forces of the market. Since 2020, central banks have become aggressive buyers of gold. According to the World Gold Council, in 2023 they purchased nearly a third of the total gold mined — 1,037 tons. In the first quarter of 2024, reserves increased by another 290 tons.
🌍 Why do central banks need so much gold?
Gold purchases are a strategic measure to protect against economic uncertainty and geopolitical risks. Instances of freezing foreign reserves, as happened with Russia in 2022, have prompted many countries to diversify their reserves. For example, the Central Bank of Turkey added 12 tons of gold to its reserves, bringing them to 552 tons, while the People’s Bank of China bought 224.88 tons of gold in 2023.
🚀 Why does gold remain attractive?
Amid deflationary pressure on crude oil prices, gold continues to play the role of a stable store of value. This trend is expected to increase its effectiveness in 2024, providing investors with confidence and protection from market volatility.
Stay tuned for our updates to keep abreast of the latest news in the gold market and not miss your investment opportunities!