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Gold is considered a safe and lucrative investment because it can be used as a hedge against inflation and currency fluctuation. Given the uncertainties surrounding the economy, gold prices are rising steadily. Thus, this could be the right time to invest in the leading gold ETF SPDR Gold MiniShares Trust (GLDM – Get Rating), which can cushion your portfolio against enhanced market volatility.
Gold has been on an unstoppable run in recent weeks, with various factors at play pushing its prices close to an all-time high of $2074.88. One of the most significant catalysts for gold this year has been the outlook for interest rates. The Fed has been raising rates for over a year in its ongoing fight against inflation.
While the latest CPI report suggests that the Fed is progressing in getting inflation under control, there are growing anticipations of another interest-rate increase in May. The yellow metal is considered a ‘safe haven’ if increasing interest rates trigger a potential recession and weigh on corporate earnings.
Furthermore, bond yields have an opposite relationship with gold. With the two-year U.S. Treasury yield currently down from its peak of 5.1%, gold prices are typically going up. Also, the negative correlation between gold and the U.S. dollar has held up so far in 2023. A weaker U.S. dollar will likely…
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