Gold Buyers Return Amid Fed Rate Cut Expectations and Geopolitical Tensions

Gold buyers have made a strong comeback in recent weeks, driving bullion demand to its highest level in months. The surge is attributed to a shift in the macroeconomic outlook, with investors betting that the Federal Reserve will cut interest rates later this year.

This expectation reduces the opportunity cost of holding non-yielding assets like gold, making it an attractive safe-haven and hedge against inflation.

Central banks, particularly those in emerging markets, have been consistent buyers, diversifying their reserves away from the U.S. dollar. According to the World Gold Council, central bank purchases in the first quarter of 2025 reached 290 metric tons, a 15% increase year-over-year.