Gold prices rebounded on Monday’s opening bell climbing above the $2,300 mark. The XAU/ USD chart, which measures the spot prices shows it touching the $2,320 threshold in the day’s trade. The precious metal spiked by nearly 18 points surging 0.80% in the last 24 hours. The bullish run indicates that the risk appetite for gold has increased among commodity investors worldwide.
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Retail investors, institutional funds, and Central Banks of developing countries are on a gold accumulating spree. The yellow metal is among the top-performing commodities this year along with copper, silver, and the U.S. dollar. The risk appetite is growing in Q2 of 2024 even among retail investors who are making the most out of the bullish phase.
What’s Driving the Risk Appetite For Gold Buyers in 2024?
Central Banks purchasing tonnes of gold is giving confidence to retail investors to trade and is driving their risk appetite. China is the leading buyer of the precious metal that’s eventually pushing its prices up in the indices. In addition, developing countries like Russia, India, Brazil, and South Africa have also accumulated billions worth of gold this year.
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Reports suggest that the majority of developing countries have accumulated gold to prevent their economies from crashing if the U.S. enters a recession. Central Banks have the U.S. dollar as reserves and a recession will also hit their native economies.
Therefore, it is indicated that developing nations want to play it safe as a recession could push gold prices higher. The risk appetite for gold from Central Banks remains strong and institutional funds and retail investors are following suit.
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The bullish development could make gold prices climb above the $2,500 next. If it holds on to its resistance level of $2,500, the next leg-up for gold could be $2,700. The appetite for risk in gold is growing and investors are making the most out of the rally.