Gold Surges 25% as Central Banks Fuel Rate Cut Bets

Gold has experienced a significant surge in value, rising by approximately 25% in the past year. The metal currently trades near $4,257 per ounce.

The rally is attributed to two key factors: central banks' purchasing of gold and market expectations of further Federal Reserve rate cuts.

Central banks have been buying large quantities of gold, with a net 244 tonnes added in the first quarter of this year. This is above both quarterly and longer-term averages.

Experts believe that traders are pricing in further Fed rate cuts, which reduces the opportunity cost of holding gold as it yields zero interest.