Gold Surges Above $4,600 as Investment Demand Rebounds
Gold prices have surged to above $4,600 per ounce due to renewed investment demand and concerns over the US fiscal outlook.
According to Ewa Manthey, Commodities Strategist at ING, the recent rally is not just a response to lower yields but also reflects growing worries about government borrowing and currency debasement.
The increased Treasury buybacks, announced by the US Treasury, have led to renewed attention on government borrowing and its impact on gold's appeal as a store of value.
Manthey noted that central bank demand has remained strong throughout gold's consolidation period, with reported net purchases reaching 51 tonnes in June.
However, inflation concerns remain a major headwind for gold's price rally, with rising energy prices adding to US price pressures and keeping monetary policy restrictive.