These geopolitical tensions also increase pressure on financial markets, but they help boost the demand and value of gold. As mentioned earlier, I believe that the two factors that will have the biggest impact on the Gold Price Per Gram will ultimately be monetary policy and geopolitics. Since gold is also considered a very effective portfolio diversifier due to its low and negative correlation with major asset classes, it tends to rebound in times of uncertainty, so one of the factors to consider is the relationship between gold and other asset classes that feel pressure or pleasure in current financial circumstances. In the short term, the negative impact of these trade tensions has only caused a modest response from the Gold Price Per Gram. But then, in the 19th century, most countries were printing paper coins backed by their gold values.
Given the cyclical nature of the markets, the upward movement in gold prices is likely to remain intact for several more years. The fact that gold functions as a safe asset, which often moves against correlation with traditional markets, means that the commodity is an excellent hedge against financial problems, but it is also an asset that has shown steady and solid growth in value for a long time. For example, India consumes between 800 and 850 tons of gold annually and rural India accounts for 60 percent of the country's gold consumption. In fact, the winter months, from December to February, tend to be the strongest time for gold in most years, and the opposite is the case during the summer.
In addition to normal seasonality, gold prices have also had problems due to a major policy change by the Federal Reserve, the central bank of the United States. There is a demand for gold from people seeking to protect themselves from volatility and uncertainty. However, there are also many factors that help boost gold and, for the most part, have caused the price to rise slowly over the years, such as currency inflation and the need for safe assets. There are many factors, of course, that could affect the price of gold both in the short and long term, he said.
In the future, gold should remain a solid store of value; however, it has been losing part of its market share to Bitcoin and other cryptocurrencies that offer similar benefits. All of these large-scale events increase both volatility and uncertainty in the markets, putting downward pressure on gold prices.