Gold Bull Market May Have More Room to Run: Central Banks and Geopolitical Uncertainties

Gold's bull market may have more room to run according to Frank Holmes, CEO of U.S. Global Investors. Central banks, particularly those in emerging markets, have been accumulating gold at an unprecedented pace, purchasing over 1,000 tonnes in 2023 and continuing into 2024.

This trend is a structural shift, not a cyclical blip, as countries seek to diversify away from the U.S. dollar and hedge against geopolitical risks, Holmes emphasizes. The Federal Reserve's shift toward a more dovish stance further supports gold prices, with real interest rates expected to decline and reducing the opportunity cost of holding non-yielding assets like gold.

Ongoing conflicts in Eastern Europe and the Middle East, along with trade tensions between major economies, continue to fuel safe-haven demand for gold. Retail investors are returning to gold through ETFs and physical bullion, adding to the demand side of the equation.