Gold is rising thanks to USD alternatives
Gold is rising thanks to USD alternatives
Gold surge has culminated in a 33% rise and is inching closer to the $2,800 remarkable milestone.
The yellow metal is now trading at approximately $2,750 per ounce. This represents a 1% increase from yesterday’s low of $2,720.
The current bullish momentum in gold prices is underscored by a growing interest among investors, particularly as global economic uncertainties loom.
This sentiment has been further fueled by geopolitical tensions and the ongoing shift away from the dominance of the US dollar, particularly among countries like Russia and China.
These nations have been exploring alternatives to the dollar, and gold has emerged as a key player in this evolving landscape.
In Switzerland, an estimated 200 tonnes of gold, valued at CHF 15 billion ($17.3 billion), is privately owned, with about 22% of the population participating in gold investment. This trend is notable given that 65% of Swiss respondents consider gold a "sensible" investment, driven by its perceived stability and long-term value.
However, this rush to invest in gold is not without caution as many investors are also looking to realize profits from their holdings, with emergency sales becoming more common.
Technical analysis signals potential retracement
From a technical perspective, gold's relative strength index (RSI) indicates overbought conditions, suggesting a possible short-term decline. The recent price swing has exceeded the previous all-time high of $2,680 recorded on October 6, but the current RSI remains lower than it was during that peak. This divergence could signal that the market is nearing a top, with a bearish retracement imminent.
While gold is approaching unprecedented levels, If the overbought conditions persist, a short-term pullback may occur, prompting buyers to reassess their positions. Nonetheless, the underlying demand for gold remains strong.
FOMO is driving institutional interest in gold. Meanwhile, private investors have remained hesitant to liquidate their holdings.
