Why is gold rising? What are the reasons behind the price increase?

The rise in gold this year cannot be stopped. In addition to the increase in physical demand, concerns created by geopolitical risks have also been effective in making the yellow metal the most profitable commodity of 2024. The end of the high-interest-rate environment worldwide, geopolitical risks, and the US elections are among the most important factors supporting gold. Although central bank purchases have weakened, they continue to be a long-standing support factor for gold prices.

UNCERTAINTIES AND LOW INTEREST RATES ARE DRIVING GOLD UP

Tensions that have lasted for nearly a year continue. The scale of the tension has increased further with the involvement of countries such as Iran and Lebanon in the conflict between Israel and Hamas. While rising tension directs investors toward safe havens, gold has also brought mobility with it; the sharpest annual rise since 2012 has been recorded.

On the other hand, a monetary easing process has begun worldwide, led by the Fed. An environment where interest rates will fall provides the climate that gold seeks. While the fact that the Fed's interest rate cuts have not materialized to the expected extent is not the only factor supporting gold's rise, it strengthens this situation somewhat.

THE IMPACT OF THE US ELECTIONS ON GOLD

Gold prices continue to rise along with the increasing uncertainty in recent times. In particular, the upcoming US elections have become an important factor for investors. While uncertainties in the election process cause increased volatility in the markets, investors are turning to gold, which they see as a safe haven.

Analysts state that the potential effects of the US elections on economic policies will affect gold prices. The impact of the election results on the monetary policies and interest rates of central banks could increase demand for gold. High inflation and rising geopolitical risks are also among the other factors driving investors toward gold.

In the short term, it is thought that gold prices may fluctuate as expectations regarding the election results take shape. While investors carefully monitor the economic environment that will emerge after the election, profit-taking and market reactions may come to the fore regarding the direction of gold prices.

UNCERTAINTY CONTINUES

November 5, 2024, is the date of the elections to be held in the US. Since the outcome of these elections could affect the political and economic orientation of the US, it could create significant volatility in the markets. In particular, investors are in a state of great uncertainty regarding how the monetary policies and economic measures to be implemented after the election will affect gold prices.

News Source: 12punto