A new analysis by the prestigious Bank of America has revealed compelling insight. The bank has shared how gold has defeated the euro to emerge as the second-largest central bank reserve asset.
With the current geopolitical changes, Gold is surging at a record pace, marching aggressively towards $3000. If the market favors the yellow metal, it may soon surpass leading assets and spark a massive price rally.
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Euro vs. Gold – Which Is The Best Investment?
The analysts at Bank of America have shared how gold has surpassed the euro as the second-largest asset for banks worldwide to hoard. With the central bank gold buying spree that thrived this year, gold reserves in world banks have reached their peaks, with the yellow metal holding up a nearly 16% share as a leading central reserve asset.
At the same time, the US dollar reserve share value has dropped significantly. The USD reserve share dropped 58% as Eastern market trends promoted a new market paradigm of replacing fiat with gold.
Central banks around the world have shown a particular keenness for acquiring gold. 2024 was dubbed the golden year as global banks showed their fierceness in accumulating gold. The banks brought nearly 483 tons of yellow metal in the first six months of 2024, which indicates a spike of 5% compared to last year’s records.
On the contrary, the data compiled by the Atlantic Council shows that the shares of dollars making up global reserves have declined by nearly 14% in the last century.
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Gold Price Forecast
With the recent interest rate cuts announced by the Federal Reserve, the value of the US dollar is bound to shrink temporarily. At the same time, the rising US debt metrics and weaponization of the US dollar are also wreaking havoc on the currency.
“A falling dollar and lower interest rates will make it even more difficult to attract foreign interest. In funding additional Treasury debt—something that has already become problematic.”
In this wake, Gold is set to spark a massive rally, eventually touching the $3000 price mark.
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