The odds favor a slowdown in the rise of the US dollar, and bond yields are the main indicators of gold. These geopolitical tensions also increase pressure on financial markets, but they help boost the demand and value of gold. When U.S. government bond yields rise, gold is likely to trend sideways or even downward, while falling yields tend to cause very positive movements in gold prices.
The World Gold Council (WGC) explained that this was due to the fact that domestic prices reached a record in a context of falling incomes in rural areas. By way of example, it is shown below that China and India (with strong economic growth) have become the main buyers of gold over the past two decades to invest and create reserves and, therefore, have given additional encouragement to price increases. Investing in gold has never had a better time to start than right now, the price is about to skyrocket, but participating in the trading of such a product can be difficult due to its physical nature and the exclusivity of many gold brokers, who are not as open to new traders. Gold is not an asset that is prone to large price fluctuations or high volatility, but it is known to grow almost constantly as its uses and market desire continue to increase.
The foundations are being consolidated for the price of gold to resume the upturn that began with that base, says Mike McGlone, senior commodity strategist at Bloomberg Intelligence. Jeff Clark, senior analyst at GoldSilver, explains why it's never been a better time to own gold than now. Emphasizing the attractiveness of gold as an asset for good and bad times, most investors would buy gold regardless of whether the national economy was growing or in recession. Investors seem to be less concerned about rising rates and their impact on gold, as they expect them to fall in the future.
This could mean that, in the future, rates could be a minor obstacle to the price of gold, leaving some of its supporting factors to take center stage. The actions of these participants can substantially change demand for gold jewelry and investment instruments. Large investors bought gold to protect against possible deflation in some countries, which could be due to the slowdown in economic growth and rising inflation in other countries, as governments continue to inject liquidity into the economy. Gold is an “emotional asset” that reflects investors' feelings about certain market events, including inflation.
Gold is one of the most consolidated and mature markets in existence when it comes to investable assets.