Can the price of gold still rise by 20%? Gold is not only priced in US dollars

Potential demand for gold remains strong. Although gold ETF (exchange-traded fund) investors slightly reduced their gold holdings earlier this month, their positions have recently shown greater stability, while hedge funds have moderately increased their net long positions in gold. Central banks in multiple countries continue to purchase gold, individual investment activities are increasing, and there is a structural rise in demand for gold jewelry in Asia as incomes grow — all of which suggest that total global demand for gold is likely to remain robust.

UBS analysts stated that for investors who are fond of gold, moderate allocation to gold can enhance portfolio diversification and help hedge against systemic risks. For those who have already allocated substantially to gold and earned significant returns, expanding commodity investments to include assets such as copper and aluminum may help diversify future sources of income.

A broader macroeconomic backdrop also supports ongoing demand for this precious metal, since the US government shows little or no willingness or ability to reduce the rapidly rising debt levels, which provides sustained and stable support for gold prices.

Midthun is optimistic that the international gold price will rise to around $5,500/oz this year, and given the macroeconomic risks facing the world, this figure may even be too conservative.

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