Consumers continue to grapple with elevated inflation, with the U.S. core Consumer Price Index for July showing a yearly rise of 3.1%. However, inflation is only part of a much broader concern — the ongoing erosion of fiat currency purchasing power — a factor expected to fuel long-term demand for gold.
The precious metals market is witnessing strong momentum as investors seek safe-haven assets amid a growing lack of confidence in traditional currencies. Gold remains firmly above $3,300 per ounce, hitting record highs against the Japanese yen and trading near record levels against the British pound, euro, Canadian dollar, and Swiss franc.
Global debt levels are rising across major economies, from the U.S. and Canada to the UK and Europe. In such an environment, central banks face significant challenges in raising interest rates, as higher borrowing costs would strain debt servicing and slow economic growth. This is driving expectations for rate cuts, financial repression policies, and even potential yield curve controls in the future.
Market projections indicate that the U.S. Federal Reserve is likely to cut interest rates by 25 basis points in September, with the possibility of further reductions before the year ends. Lower yields would be a bullish catalyst for gold, potentially pushing prices higher before the close of the year.
In the long run, the outlook remains highly favorable. If current macroeconomic trends persist, gold prices could potentially double within the next five to ten years, as investor demand for reliable stores of value continues to strengthen.
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