Analyst Points Out A New Catalyst Behind Recent Surge in Gold Prices

Published on: Apr 19, 2024
Author: Caroline Kong

The recent surge in gold prices can be largely attributed to geopolitical tensions and economic uncertainties, but Lobo Tiggre, editor and analyst at the investment firm Independent Speculator, stated in an interview with Kitco News this week that these are not the primary catalysts behind the rally.

He pointed out that while geopolitical tensions are making headlines, the fact that gold prices have been rising for a couple of months suggests that the factors driving the sustained increase in gold prices are more complex than just geopolitical tensions.

The fundamental reason, he said, is the emergence of new buyers in the gold market. While central bank purchases support gold prices, there is also a new force creeping into the precious metal.

The analyst believes this is an undeniable shift in the gold market, indicating a broader base of demand for precious metals, which could sustain higher gold prices over a longer period.

Tiggre reminds investors that the current gold price is only a nominal all-time high, and that in fact, adjusted for inflation, the true value of gold is much higher and should exceed $3,400 or $3,500 per ounce.

He added that the continued bullish outlook for gold is due to a more widespread recognition of the metal’s value. Even minor changes in investor behavior could have a significant impact on gold demand and prices in the future. “If just 1% of the world’s population decides to add a little bit of safe-haven metal or real safe-haven assets to their investment portfolio, the investment demand could easily double.”

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