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Weekly Gold Analysis - Second Week of May 2024

Gold prices have continued to hit record highs, surpassing $2,400 per ounce by the end of the week. This surge is driven by geopolitical tensions, new US sanctions on Chinese goods, and technical market factors. In Egypt, gold prices rose slightly, with 21-carat gold reaching 3,180 EGP per gram, and 24-carat gold at 3,646 EGP per gram. 

Global Gold Market Trends:

Central Banks and Chinese Investors Recent data shows significant impacts on the gold market due to central bank activities and shifts in Chinese investment behaviors. Central banks have been actively purchasing gold, causing a global supply-demand imbalance. In 2022-2023, following the collapse of real estate and stock markets, Chinese investors increasingly turned to gold as a safe haven. These trends highlight gold's evolving role in the global financial system.

Gold's allure increased after unprecedented rises recorded since early 2024, becoming the only metal with the most enigmatic performance in recent weeks, breaking away from the logic of Federal Reserve policy — which has been unclear about the timing of interest rate cuts amidst continued high inflation rates — and defying the traditional rule that presumes an inverse relationship between the dollar and gold. Central banks and investors hedging against growing fears of geopolitical unrest in the Middle East and Russia had the strongest impact in driving the gold to historic levels.

Silver is expected to outperform gold in 2024 with global demand forecasted to reach 1.219 billion ounces, driven by strong industrial applications and green economy initiatives. Prices are predicted to rise, with spot silver potentially reaching $32 per ounce in the second half of the year.

Gold prices hit record highs as investors seek a safe haven amidst global economic uncertainty and geopolitical tensions. Analysts debate the driving factors behind the surge.

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