The price of gold is surging rapidly. The precious yellow metal is currently a favorite among global banks, which have been hoarding it at a record pace. But why are banks stocking up on gold like there’s no tomorrow? Let’s find out.
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Global Gold Purchases Hit A New Record
According to a post uploaded by the Kobeissi Letter, central banks’ global net purchases of gold have breached the 480-tonne mark. The portal further pointed out stellar AUX statistics, indicative of global central banks purchasing nearly 480 metric tons of gold in the first half of 2024.
“BREAKING: Global net gold purchases by central banks reached 483 metric tons in the first half of 2024, the most on record.”
Furthermore, the portal shared how the global bank gold purchase has spiked 5% as compared to the AUX purchases made in 2023.
“This is 5% higher than the previous record of 460 tons set in the first half of 2023. In Q2 2024, central banks bought 183 tons of gold, marking a 6% year-over-year increase.On the other hand, this was 39% lower than the 300 metric tons of purchases seen in Q1.”
The global bank gold buying spree was spurred by multiple factors. For instance, changing geopolitical narratives were the primary harbingers of this change. Apart from this, the constant devaluation of the US dollar also played a pivotal role in pushing investors into exploring alternate assets such as gold.
Often dubbed as a capable hedge against inflation, the consistent fluctuations in the price of USD were also a strong undertone fueling the global banks’ gold buying spree.
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The Yellow Metal To Continue Surging And Peaking To New Highs
According to a new analysis presented by Rashad Hajiyev, a notable finance analyst, the precious yellow metal will continue to surge and eventually hit the $3000 mark. Per Hajiyev, AUX is advancing and has so far rallied nearly 23%. Hajiyev later drew a compelling analysis, adding that the asset had formed a similar pattern in 2023, after which the asset rallied 50% within 14 months.
The analyst later shared that the yellow metal is on track to hit $3000 without encountering additional hassles.
“Gold is in the advancing cycle, and so far it has rallied 23% after breaking out in late February 2024. Back in 2019, Gold formed a similar breakout and rallied 50% within 14 months. So the present rally has a lot of room with my minimum target of $3,000.”
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