World Gold Council (WGC) Market Strategist Joe Cavatoni assessed the present possibilities for investing in gold during an appearance on CNBC’s “Closing Bell: Overtime” on March 25. Cavatoni made the comment in light of the commodity’s impending record highs.
The discussion, under the direction of co-anchor Jon Fortt, examined the factors that attract investors to gold, the consequences of worldwide economic policies on its valuation, and the ways in which geopolitical risks affect gold markets.
The World Gold Council contributes significantly to the gold industry through the provision of valuable insights, the development of financial products supported by gold, and the promotion of awareness regarding the sustainable asset status of gold. Cavatoni had a number of jobs in the financial services industry before joining the World Gold Council, including senior roles at companies including UBS and Goldman Sachs.
Cavatoni kicked things off by talking about how spot Bitcoin ETFs and other new financial instruments compare to gold. He emphasized the special place that gold has in an investing portfolio, saying that it provides diversity during bull markets and protection against down markets. Furthermore, the emphasis on gold’s liquidity and long-term return potential established it as an essential asset for educated investors.
The effect of monetary policies, especially those of the Federal Reserve, on the price of gold was the subject of much discussion. Cavatoni said that previous Fed meetings hinted at a rate decrease expectation, which might be good news for gold investors. Gold prices have had difficulties due to historically high interest rates; however, the expected policy change may cause this trend to reverse.
Additionally, Cavatoni recommended that investors closely monitor geopolitical and local political risks. In view of increasing geopolitical tensions and the political uncertainty caused by elections throughout the world, he said that central banks around the globe are reevaluating their dollar-weighted portfolios. As a result of these considerations, gold is appealing as a hedge against uncertainty, says Cavatoni.
Concerning the impact of economic decoupling and the breaking of international ties on gold, Cavatoni emphasized the precious metal’s appeal on a worldwide scale. He brought up the fact that gold demand fluctuates by area, using China as an example of a country where investors pour money into gold amid market crashes, real estate bubbles, and equities market difficulties. In times of economic turmoil, gold is a robust investment, according to Cavatoni, who sees a pattern of demand spikes that are unique to regions.
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