How does BlackRock view the direction of gold prices?

With gold prices hitting record highs, BlackRock says the gold price's new highs are not just a sign of investor fear, but rather a reflection of investor confidence. “Dare to take risks” More (risk appetite), which is different from previous periods where gold tends to rise when there is “uncertainty” or when there is “High risk” only

What factors cause the price of gold to rise?

BlackRock sees several supporting factors, including:

• Anticipation of a Federal Reserve (Fed) interest rate cut has investors anticipating a decline in bond yields, making non-yielding assets like gold more attractive.
• The US economy is starting to slow, with slowing labor market figures giving the Fed more reason to cut interest rates.
• Global central bank gold purchases hit multi-year highs “Long-term demand” of gold
• The public debt levels of major countries are very high, causing investors to worry about the future stability of the financial system. Gold is seen as a safe asset. “Prevent structural risks”

Strategic perspective of BlackRock

• BlackRock views gold as a “tactical exposure” and not a permanent asset.

• Considering the short-term surge “Speculation” Coming in a lot may cause “Correction” Yes, if purchasing power slows down.
• BlackRock cautions investors to exercise caution, as while the underlying trend remains bullish, volatility could increase in the near term.

Economic and market behavioral implications

• normal “Gold is up” Often reflects the situation “Risk-off” (Investors are afraid of risk) but this time it's the opposite, gold is rising along with the world stock market, which means “Investors are taking on more risk, but are still buying gold to diversify their portfolios.”

• Therefore, it can be seen that "gold" It is no longer just a safe haven asset, but has become part of an active allocation strategy.

Issues of perspective BlackRock

• The gold price trend is still bullish overall, but there is a risk of speculation.
• The main positive factors are the Fed may cut interest rates, lower inflation, and continued central bank purchases.
• Risk factors: Market correction, earlier-than-expected monetary policy changes
• Strategy: Hold some gold in your portfolio to diversify your risk, but don't over-invest.

Further analysis

BlackRock's interpretation is in line with the current global market trend where investors “Dare to take risks” More after the Fed was expected to start cutting interest rates in 2026, but the truth is that gold and stocks are rising together, which is a signal. “Overflowing money in the system” (liquidity-driven rally)
So if money flows start to slow as the Fed pauses interest rate cuts or begins tightening again, gold prices could face profit-taking.

refer www.investing.com