Gold Prices Soar 9.6%, But Investors Warned Against Chasing Rally

Gold prices have surged 9.6% in a month, providing some relief to investors who had seen stagnant returns over the past year. The yellow metal's rally has been driven by expectations around Federal Reserve policy and concerns over the US fiscal position.

According to Mohit Bagdi, head of research at MIRA Money, 'expectations of lower real rates have supported the demand for non-yielding gold.' NS Ramaswamy, head of commodities at Ventura, adds that 'US national debt nearing $40 trillion has contributed to the debasement trade.'

Central bank buying and geopolitical tensions have also contributed to the rally. However, investors are warned against chasing this asset class due to its volatility.