Gold prices recovered at Monday's opening bell, climbing above the $2,300 mark. The XAU/USD The chart, which measures spot prices, shows it reaching the $2,320 threshold in day trading. The precious metal rose by almost 18 points in the past 24 hours, rising 0.80%. The bullish run indicates that risk appetite for gold has increased among commodity investors worldwide.
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Private investors, institutional funds and central banks of developing countries are accumulating gold. The yellow metal is one of the best performing commodities this year, together with copper, silver and the US dollar. Risk appetite will grow in the second quarter of 2024, even among retail investors who are making the most of the bullish phase.
What is driving gold buyers' risk appetite in 2024?
The fact that central banks are buying tons of gold gives retail investors confidence to trade and boosts their risk appetite. China is the main buyer of the precious metal which ultimately pushes up its prices in the indices. Moreover, developing countries such as Russia, India, Brazil and South Africa have also accumulated billions in gold this year.
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Reports indicate that the majority of developing countries have stockpiled gold to prevent their economies from collapsing if the US enters a recession. Central banks have the US dollar as a reserve and a recession will also hit their own economies.
That is why it is indicated that developing countries want to play it safe, because a recession could push gold prices up. Central banks' risk appetite for gold remains high and institutional funds and private investors are following suit.
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The bullish development could then push gold prices above $2,500. If it holds its resistance level at $2,500, the next rise for gold could be $2,700. Risk appetite in gold is growing and investors are making the most of the rally.