"Prices have come off sharply from recent highs as energy markets push inflation expectations higher and delay the path to interest rate cuts. Gold, being a non-yielding asset, is reacting to this shift in the short term."
"Central banks, including the People's Bank of China and the National Bank of Poland, have been buying at a pace we have not witnessed in decades. This is long-term strategic allocation on a global scale."
"De-dollarisation is gradually occurring through reserve diversification. Gold is central to this process because it carries no counterparty risk and no political conditions."
Gold prices have fallen significantly since the war in Iran began, dropping to around $4,600 an ounce. This decline is attributed to rising inflation expectations and delayed interest rate cuts. Despite this downturn, strong sovereign demand from central banks, which have purchased over 1,000 tonnes annually for three years, is expected to drive prices up. Central banks are diversifying reserves, with many expecting gold to increase in their portfolios over the next five years, indicating a shift towards de-dollarisation and financial resilience.
Read at London Business News | Londonlovesbusiness.com
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