North India Statesman
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If you keep an eye on the prices of gold, then you must have seen that gold is touching the sky at this time. Prices have reached its highest level so far, due to which both investors and common buyers have a question that why is this happening and what will happen next?
Two big reasons are working behind this record breaking boom of gold.
1. Increased international tension with Russia
Whenever there is war anywhere in the world or any major geopolitical tension, investors get nervous. They are afraid of risky places like the stock market and want to invest their money in a “safe” place. In such a situation, gold has always been considered the most reliable “safe base”.
Recently, the international tension about Russia has increased, there has been an atmosphere of fear in the market. Due to this fear, people and central banks around the world are shopping for gold, which has increased its demand and prices have reached record high.
2. American Federal Reserve Trial
The decisions of the US Federal Reserve (US Fed) ie US central bank also have a direct impact on the price of gold. When the fed gives any indication about interest rates, it determines the strength or weakness of the dollar. At present, the market hopes that the US Fed may further cut interest rates. When the interest rates decrease, the dollar is slightly weak and investing in gold becomes more beneficial. In this hope, investors are attracted towards gold.
What can happen next?
Market experts believe that as long as this stress will remain in the world and there is no major change in the attitude of the American Fed, gold prices may continue to rise. However, investment in gold is always subject to market risks, so it is prudent to investigate before taking any decision.
