Gold’s surging price levels are breaking all its previous set records. The precious yellow metal is sitting at a new ATH of $2,395, with predictions of it rising past $2,500 soon. With central banks buying gold in bulk, global sentiment towards gold is rising on a meteoric rise. However, the current gold scenario seems dicey from the perspective of the US Economy.
Per a new analysis uploaded on X, the surge in gold prices may wreak havoc on the economy, hinting at a possible inflationary wave that may sweep away investors’ profits and returns.
Also Read: Silver Trends Amid Gold’s Price Hike: Why is Silver Rising?
Gold’s Latest Price Surge
Gold prices are touching record highs, breaking all price barriers in their wake.
The sharp ascent in the price of the precious yellow metal is triggered by the possible hoarding of it by the global central bank reserves.
Per a Reuters report, China has recently been amping up its gold purchases, buying nearly $160,000 troy ounces of gold. Similarly, countries like Kazakhstan, India, and Russia have also been making astonishing gold purchases, contributing to the surge in the metal’s prices.
According to BusinessInsider Data, Spot gold is standing at 0.85% to $2,393.72 per ounce. The U.S. gold futures are trading 0.52% higher at $2,408.
How Can Surging Gold Prices Threaten the US Economy?
The recent surge documented in the prices of gold may cause significant trouble for the US economy. Per a prediction made by analysts on X, the high gold prices have often been accompanied by a sweeping inflationary wave toppling the US economy to touch new lows.
Dubbing the gold surge as a major “warning sign,” the Game of Trades handle on X corroborated the theory by revealing solid historical data and stats. The handle shared that the last time gold touched a new ATH in 2007, the US unemployment rate tumbled down, bringing in the infamous 2008 financial crisis for the nation to battle with.
Similarly, the analyst shared another incident, discussing the yellow metal price surge in 1978–79. The archaic price hike had triggered a “destructive wave of inflation” that swept the US economy, with CPI data breaching past 12%–15%.
Gold is generally considered a hedge against inflation. With user sentiment pivoting towards gold, several analysts are considering it an ominous sign. The direction hints at a possible US economic meltdown which may pose significant damage to the US
Also Read: China and Russia Push Gold’s Record Rally Towards $2,280
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