Gold Gains 100% in 28 Months, But Drops 2% – Is the Rally Over?
Gold prices have seen an extraordinary rise of 100% over the past 28 months, driven by global economic uncertainty, high inflation, and safe-haven demand. However, a recent 2% decline over the past two months has sparked investor concerns: Is the gold rally coming to an end?
Key Factors Behind Gold’s Surge
High Inflation: Persistent inflation pushed investors toward gold as a hedge.
Geopolitical Risks: Tensions in global regions boosted gold’s safe-haven appeal.
Central Bank Buying: Many central banks increased gold reserves.
Weakening Dollar: A falling dollar often supports gold prices.
Why the Recent Dip?
Profit Booking: After a long rally, investors are cashing in on gains.
Rising Bond Yields: Higher yields make non-yielding assets like gold less attractive.
Reduced Geopolitical Tensions: A slight easing in global conflicts may have lessened demand.
Interest Rate Clarity: Signals from major central banks suggest rate hikes may pause or reverse, reducing urgency to hedge.
Is the Gold Rally Over?
Not necessarily. While gold has cooled off slightly, this may be a short-term correction rather than a trend reversal. Historically, gold has shown such pauses during long bull runs.
What Should Investors Do?
Long-Term Holders: Stay invested if gold is a part of your portfolio diversification strategy.
Short-Term Traders: Watch for technical support levels; more downside could follow if key levels break.
New Investors: Consider staggered entry (SIPs in gold ETFs or sovereign gold bonds) rather than lump-sum investments.
FAQs: Gold Price Trends 2025
Q1. Why did gold rise so much since 2022?
Due to high inflation, weak dollar, central bank demand, and global tensions.
Q2. Is a 2% dip a sign of a reversal?
Not necessarily. It could be a normal correction after a strong uptrend.
Q3. Should I sell gold now?
Only if your investment goals are met. Long-term fundamentals remain strong.
Q4. How can I invest in gold now?
Options include gold ETFs, sovereign gold bonds, or digital gold platforms.
Published on: June 28, 2025
Uploaded by: PAVAN
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