Editor's note: Anyone who says gold or silver will definitely go up is speculating. The signs are clearly positive for precious metals, but this article and any related communications are for informational purposes only and should not be considered financial advice. We do not offer personalized investment, financial or legal advice. This outlet benefits from purchases made through our sponsors.
Gold's climb toward $3,000 an ounce was halted last month when China's central bank halted its purchases. However, a survey of 70 central banks by the World Gold Council (WGC) indicates robust future buying. None of those surveyed foresee a decrease in central bank purchases, with 81% anticipating an increase.
“China broke its 18-month gold buying streak in part to 'pump the brakes' as prices have soared,” said Jonathan Rose, managing director of Genesis Gold Group. “But more importantly, they were testing resilience and control to see if their actions would cause prices to plummet, which they didn't.”
Central banks significantly influence gold prices, with purchases last year near record levels. While private investors sold in the first quarter, May saw a reversal, with ETF holdings rising.
Private buyers could raise prices further, especially if US interest rates fall. The WGC survey revealed a strong expectation of increased gold holdings at central banks over the next five years. Motivations include strategic rebalancing, economic concerns and geopolitical instability.
“We often disagree with the way central banks act, but their motivations are aligned with our customers right now,” Rose said. “Central banks are hedging their investments because they're concerned about turbulent economies. Our clients feel the same concerns and that's why they're transferring or moving their retirements into physical precious metals.”
Genesis Gold Group specializes in taking old or current retirement accounts and moving them into Genesis Gold IRAs. This “safe haven” approach is becoming more popular as financial strife rises across the country and around the world.
The difference between individual investors and central banks when it comes to gold is that with central banks, they have some degree of control over prices. As they push for central bank digital currencies, all eyes are on the US dollar and the moves made by the BRICS countries. These factors suggest that central banks will continue to play a crucial role in the gold market amid ongoing global tensions and economic challenges.
Ask for the free and definitive gold guide from Genesis Gold Group today.
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