The US dollar and gold prices are on a roll in 2024 delivering top profits to investors this year. Both assets are now the most sought-after investments as they bounce back quickly after a fall. That’s not the case in the equity markets as a crash takes months or even years to recover. Investors who took an entry position into the US dollar and gold early this year are now sitting on massive profits. The XAU/USD Spot Gold is now moving towards reaching the $2,400 mark.
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Why Are Gold Prices & US Dollar Rising in 2024?
The growing conflicts between Russia and Ukraine, Israel and Palestine, and the new Iran and Israel are making gold and the US dollar shoot up in price. Investors are finding gold and the US dollar to be a safe haven during times of global instability and turmoil.
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Institutional investors are parking their holdings in the US dollar and gold as the equity and broader commodity markets remain at risk. Oil plays a major role in the global equity and commodity markets and Iran, and Saudi Arabia control a portion of the energy sector.
Therefore, the overall US and the global market remain on a slippery slope that can send prices crashing. Threat to the equity market directly benefits gold prices and the US dollar as it acts as a hedge against losses and inflation. The development paves the way for gold to glitter at a time of global crisis.
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In addition, currency investors are betting on the US dollar and have accumulated it at every dip in 2024. The US dollar’s DXY index fell to 101.30 early this year and now stands at 106.30.
The surge in the US dollar is giving forex investors confidence that the currency is a safe haven during wars. Therefore, both gold and the US dollar are rallying in the charts while the other sectors bear the brunt of political instability.