Gold investors should prepare for continued fluctuations in the market, but the long-term outlook appears positive according to Jeff Currie, chief strategy officer at Altis Partners. He attributes the recent rally in gold prices to robust demand from central banks, particularly in emerging markets like China, Turkey, India, and Poland.
This demand has been so strong that it has offset a significant sell-off earlier this year, which led to gold's worst quarterly performance in 13 years.
Currie explained that the sell-off was influenced by countries needing to liquidate gold to raise cash for oil purchases amid geopolitical tensions, a situation he describes as 'transient.' He believes that central banks will continue to favor gold as a reserve asset due to its stability compared to fiat currencies, which may be subject to sanctions or freezing.
A recent World Gold Council survey supports this view, indicating that central banks are increasingly storing gold reserves domestically to mitigate risks associated with geopolitical instability and inflation. Currie anticipates that while gold and other commodities will experience volatility, the overall trend will see higher peaks and higher lows in prices