Gold continues to shine brighter: 5 key reasons to add this precious metal to your portfolio

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purchase only slightly lower at 1,037.4 tonnes. This strong demand is one reason why gold prices have surged recently, rising roughly 20% over the past year.

Also Read: Planning to invest in gold as an asset class? This is how the taxation works The vast majority of purchases during 2022 and 2023 have continued to come from emerging market central banks. A World Gold Council survey, amongst Central Banks from both advanced and emerging markets, regarding factors affecting the Central bank’s decision to hold gold, throws light on the possible reasons why Central Banks, especially from emerging markets, are buying so much gold.

Interest rate policy: Traditionally, there has been an inverse relationship between gold prices and interest rates, meaning that when interest rates rise, gold prices tend to fall, and vice versa. In its recent policy meeting, the Fed had indicated for at least 3 rate cuts rate cuts in 2024. So easing monetary policy by the US Federal reserve is another contributing factor to the recent gold price rise.

Global uncertainty: 2024 is poised to see elections in more than 64 countries which brings in a lot of uncertainty in the markets. And during uncertain times, investors flock towards safety. Hence, gold becomes a natural option for them.