Gold Prices Surge Amid Dovish Fed and Geopolitical Uncertainty

Gold prices have surged by around $400 (10%) since the start of this month, reaching their highest level in over two decades.

This increase is attributed to a combination of economic and political factors, including the Federal Reserve's dovish stance on interest rates, weak employment data, and tame inflation figures.

These developments have tempered expectations for Fed rate hikes, led to a decline in the US dollar, and boosted gold demand from investors worldwide.

Central banks, particularly those in China, are among the largest buyers of gold, with China's central bank purchasing 20 tonnes last month, its biggest increase since October 2023.

A World Gold Council survey found that 45% of central banks plan to increase their gold holdings over the next 12 months, highlighting growing confidence in reserve assets.