Gold: Shield Against Inflation or Merely a Correction?

The recent surge in gold prices has generated significant debate among economic experts. According to UBS, the precious metal is expected to reach US$ 5,000 per ounce by 2027, based on three key pillars: falling real yields as the Federal Reserve eventually eases monetary policy, dollar weakness linked to US fiscal and external deficits, and persistent central bank demand. However, short-term risks should not be underestimated, as strong US data, rising oil prices, or a more hawkish Fed stance could stall the current rally and push gold prices back toward US$ 4,000 per ounce. This perspective sees this temporary decline as an opportune moment to purchase gold rather than a long-term threat. The ongoing tensions in the Gulf region, particularly with Iran-US relations, add pressure on oil prices, directly linking the future of gold to geopolitical developments in the area. Source: ForexLive (InvestingLive)