While gold prices have been declining lately on the strengthening U.S. dollar and rising interest rates, the safe-haven appeal of gold during the current period of macroeconomic uncertainty, geopolitical tension, and decade-high inflation fostered a substantial increase in demand for the yellow metal in the first quarter. The demand for gold rose 34% year-over-year in the first quarter to 1,234t, its highest level since the fourth quarter of 2018, and 19% above the five-year average of 1,039t.
According to the World Gold Council, demand for gold is expected to continue rising this year. Juan Carlos Artigas, the council’s Global Head of Research, said, “It’s a very liquid, useful asset that can improve the performance or asset allocation over the long-term. So, our research strongly indicates that gold is an effective, strict strategic investment. It’s a long-term asset.” Moreover, analysts expect gold prices can hit $2,050 per ounce.
