Gold prices break out to 8-year highs on rising demand – ZAWYA

Gold prices break out to 8-year highs on rising demand – ZAWYA

Gold prices have been rising and have broken through 8-year highs as rising demand is driving up the price of the yellow metal. Central banks have been the catalyst for the rise in the price of gold, and looking forward hedge funds could help push prices to multi-decade highs. From March through mid-June of 2020, gold prices have moved in tandem with riskier assets such as stocks, but it appears that the correlation has broken down. The recent drop in the US dollar has also created tailwinds for gold prices.Gold demand has been rising year over year, as some central banks are stocking up their reserves using gold instead of the US dollar. Most of the gold demand around the globe comes from jewelry.Next, it is mostly used as an investment asset. Central bank's demand is approximately 15% of total demand but it appears to be growing. Central banks led by Russia and China have increased their stake in gold reserves purchasing approximately 374 tons of gold in 2019. As the US has increased trade tensions around the globe, adding tariffs to influence countries like China, the demand for US dollars has declined. This has been replaced with purchases of