The gold market hunts for answers behind bullion’s sudden surge
Gold’s scorching run to an all-time high may seem easy to explain from a distance, given the fractious geopolitical climate and murky outlook for the global economy. The precious metal is famously seen as a “safe haven,” and the general view is that bullion prices should rise when interest rates fall — which many investors expect will happen later this year.
And yet. Take a closer look, and it’s far from clear: why is gold suddenly rising right now?
After trading in a fairly steady range for months, bullion started spiking in early March. It’s risen 14% since then and left a string of daily records in its wake. But geopolitical tensions have been high for months, even years, and if anything the outlook for the timing on rate cuts by the Federal Reserve has become muddier in recent weeks. So what’s changed?
Seasoned executives and analysts offer very different answers to who or what has driven gold to its unprecedented heights: Is it a central bank worried about the dollar’s role as an economic weapon? Funds betting that the Federal Reserve’s pivot to lower interest rates is imminent? An army of algorithmic traders drawn to gold simply because it’s going up? Stubborn inflation and worries about a hard landing? Weakening currencies? Upcoming elections? All of the above?
The mystery has sent industry insiders poking through the plumbing of a massive global trade that stretches across futures and exchange-traded funds from New York to Shanghai to a huge over-the-counter hub in London and world-spanning web of
