Gold reached an all-time high of £2611.66 on April 22nd following Trump’s attack on Fed chair Jay Powell. This marked yet another in a long line of flashpoints, which sent investors flocking to safe-haven assets.
However, following an apparent easing in U.S.-China trade tensions, gold has experienced a retracement since its peak. Whilst prices have been tempered for now, the broader narrative remains unchanged – the macroeconomic and geopolitical landscape remains fragile and fraught with uncertainty. Solomon Global believes that these factors will continue to bolster long-term demand for gold as a store of value.
Even factoring in this recent pullback, the gold spot price – in sterling terms – is still 34% higher than it was at this time last year and up 55% over two years. Countries including China continue to buy gold at a record rate, and some financial experts and renowned financial institutions, such as the deVere Group, predict that the gold rally could extend as far as $5,000. American billionaire hedge fund manager John Paulson also concurs and has cited $5000 by 2028.
Global peace and economic stability?
Will Trump and Xi Jinping let bygones be bygones and become amicable? Are we on the cusp of a lasting peace deal in the Ukraine-Russia conflict? Unfortunately, not. Are tensions rising between Pakistan and India? Unfortunately, so. On the home front, the picture is also austere. According to EY Item Club - a leading UK economic forecasting group - the UK's economic growth is set to slow sharply over the next two years.
In the context of persistent global and domestic uncertainty and continued private investor and institutional demand, this pullback could mark a strategic entry point within a longer-term uptrend.
Further reading: 'No one’s talking about it': Clem Chambers warns of supply chain shock, says gold price could hit $10,000
Disclaimer: This blog is for informational purposes only and does not constitute financial advice. Buying physical gold as an investment involves risk, as the value of precious metal prices can be volatile. Historical financial performance does not necessarily give a guide of future financial performance. We recommend that you conduct your own independent research and seek professional tax, legal and financial advice before making any investment decisions.
