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Gold Jumps Amid Increased Buying by Central Banks

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

  • Gold reaches over $2,350 an ounce, buoyed by central bank acquisitions and its status as a safe haven amid global tensions.
  • The metal’s 15% year-to-date gain surpasses the S&P 500’s 9%, driven by central bank demand and investor uncertainty.

Gold surpassed the $2,350 mark per ounce on Tuesday, continuing its upward trend for the eighth consecutive session, driven by robust trading momentum and demand for safe investments due to heightened geopolitical risks.

Another significant driver is the steady purchasing by central banks.

Following Friday’s jobs report that exceeded expectations, investors are reconsidering the likelihood of the Federal Reserve reducing interest rates this year. JPMorgan Chase CEO Jamie Dimon has cautioned that U.S. interest rates might rise to 8% or higher in the future.

Gold’s price keeps rising, breaking away from its usual close correlation with U.S. Treasury bonds.

This year, the precious metal has exceeded the performance of the S&P 500, recording a 15% increase compared to the 9%[1] rise of the U.S. index.

The primary catalyst behind this surge has been consistent purchases by central banks. Notably, the Central Bank of China has expanded its gold holdings for the 17th consecutive month, boosting its total gold reserves to 72.75 million troy ounces in March. Similarly, other countries have been increasing their gold reserves as well.[2]

During periods of instability, gold often becomes more appealing as investors seek refuge in assets considered safe from economic uncertainties, geopolitical strife, or inflation.

Current escalating tensions, such as Iran’s clear threats of military response against Israel and the ongoing conflict in Ukraine, are contributing to the rise in gold prices.

It’s important for investors to recognize that a reduction in interest rates by the Federal Reserve could lead to a weaker U.S. dollar, making gold more attractive as the demand for this “safe-haven” asset grows.

source: Tradingview

However, if the anticipated interest rate cuts do not occur in the near term, the price of gold might decline.

  

Investors can long Gold using our  3x Gold Miners, 3x Gold.

Alternatively, traders can short Gold using our -3x Gold Miners,  -3x Gold.

 


Footnotes:
  1. Tradingview
  2. World Gold Council

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

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Violeta Todorova

Senior Research

Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.

Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.

Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.

Julian Manoilov

Marketing Lead

Julian è entrato a far parte di Leverage Shares nel 2018 come parte della prima espansione della società in Europa orientale. È responsabile della progettazione di strategie di marketing e della promozione della notorietà del marchio.

Oktay Kavrak

Head of Communications and Strategy

Oktay è entrato a far parte di Leverage Shares alla fine del 2019. È responsabile della crescita aziendale, mantenendo relazioni chiave e sviluppando attività di vendita nei mercati di lingua inglese.

È entrato in LS da UniCredit, dove è stato responsabile delle relazioni aziendali per le multinazionali. La sua precedente esperienza è in finanza aziendale e amministrazione di fondi in società come IBM Bulgaria e DeGiro / FundShare.

Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.

Sandeep Rao

Research
Sandeep è entrato a far parte di Leverage Shares nel settembre 2020. È responsabile della ricerca sulle linee di prodotto esistenti e nuove, su asset class e strategie, con particolare riguardo all’analisi degli eventi attuali ed i loro sviluppi. Sandeep ha una lunga esperienza nei mercati finanziari. Iniziata in un hedge fund di Chicago come ingegnere finanziario, la sua carriera è proseguita in numerose società ed organizzazioni, nel corso di 8 anni – da Barclays (Capital’s Prime Services Division) al più recente Index Research Team di Nasdaq. Sandeep detiene un M.S. in Finanza ed un MBA all’Illinois Institute of Technology di Chicago.

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