Gold has, for millennia, been used as a reliable store of wealth, in addition to acting as a safe haven for investors. These past few months, the precious metal has seen a surge in its prices, capturing the attention of many investors.
It is expected that the metal’s price will continue to increase in September, having hit a new high of $2,525 an ounce in August. Below, we discuss why this could happen.
Increasing demand from investors
Appetite for gold from investors remains strong, with the current increase in price confirming the precious metal’s value proposition. It is also an opportunity for both beginner and experienced investors to buy in and possibly make a profit.
Looming geopolitical and economic uncertainty
The economic landscape worldwide is tense, with ongoing geopolitical tensions, possible recession risks in major economies and concerns about inflation doing nothing to help the situation.
This uncertainty has created an environment where the precious metal’s status as a safe-haven asset has become even more attractive. It is expected that the demand for gold will remain strong as more investors seek a hedge against these risks.
Aggressive central banks’ purchases
Central banks globally have been purchasing gold in huge quantities, with this trend showing no signs of slowing down. As more nations focus on diversifying their reserves away from traditional currencies, it is expected that the demand from these institutional buyers will continue to grow.
Experts also expect that this may play a role in the price trajectory of this metal over the next month.
Limited supply growth
Factors such as additional issues and costs linked to extraction of gold as well as limited discoveries of gold could contribute to higher prices in the long-term. It is expected that as the cost of producing gold increases and easily accessible gold deposits become scant, the price of gold will increase greatly.
Growing industrial demand
The advancement of technology has made gold increasingly valuable in several applications, including healthcare and electronics.
It is expected that as industries innovate more, the demand for this precious metal will grow. For instance, the metal’s malleability, resistance to corrosion and good conductivity make it ideal for various high-tech devices.
Even with all these factors supporting gold’s positive performance, it is important to note that the gold market is subject to volatility. Investors are advised to consider their risk tolerance and financial goals when it comes to their investments.
Given that plenty of things point to gold likely continuing to increase in price over the foreseeable future, exploration companies such as Arizona Metals Corp. (TSX: AMC) OTCQX: AZMCF) operating in stable jurisdictions are bound to attract plenty of interest from investors seeking to reap the gains of this upward trend of the precious metal.
NOTE TO INVESTORS: The latest news and updates relating to Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) are available in the company’s newsroom at https://ibn.fm/AZMCF
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