Despite the temporary halt to trade tensions, gold prices are showing no signs of cooling down. One market strategist said geopolitical uncertainty will continue to support gold prices.
In an interview with Kitco News, Joy Yang, Global Director of Index Product Management at MarketVector, said that despite gold hitting a record high above $2,800 an ounce, the precious metal could still rise higher as geopolitical instability shows no signs of ending.
Even as US President Donald Trump delayed imposing tariffs on Mexico and Canada for 30 days, the expert explained that gold's renewed drive as a safe-haven asset is not limited to a few trade disputes.
“There will be times when another unexpected factor appears that the market cannot react to. In this context, it is reasonable for gold prices to remain above $2,800/ounce,” said Joy Yang.
Geopolitical uncertainty isn’t the only factor driving gold prices, however. Joy Yang said gold will also become an important asset to diversify portfolios as investors continue to adjust their expectations in the technology sector after China announced a cheaper AI product.
With stock valuations at historic levels, investors are inherently more cautious, so demand for defensive assets like gold is increasing, she stressed.
“When you don’t know what’s going to happen, you want to find an asset that is not affected by surprises and other factors, which is gold. It tends to move in its own way, and that’s good,” Yang said.
She also stressed that gold is an important safe-haven asset because of the buying power coming from central banks, which is the main driver behind the gold price rally in 2024. Yang expects central banks to continue to increase their gold holdings.
While investment demand and speculative activity may create some volatility, Joy Yang said the overall trend for gold prices remains upward.
“The gold market has a solid foundation of central bank demand, which will continue to drive gold prices,” she said. “The current environment is still very favorable for gold demand, and I don’t see that changing this year. So I believe gold will continue to set new record highs.”
While gold is attracting attention as a safe-haven asset, the expert also sees potential in silver.
“Investors are looking for safety, but they are also looking for value. Silver has been undervalued for a long time, so I think there is significant potential for this metal,” she said.
