Notwithstanding the high levels of uncertainty in the global economy and the rise in geopolitical tensions, February was a lousy month for the precious metal market. For the past 4 weeks, gold prices dipped by as much as 5%, whereas silver, platinum, and palladium plunged by 11%, 5%, and 13% respectively.

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Analysts highlight two main reasons for a weak performance: the fact that inflationary pressures have proven to be more persistent than expected and a fear of further rate hikes by the U.S. central bank. It’s worth mentioning that there have already been calls to raise the Federal Funds rate above 6% – something that investors can keep track of as well as other economic events with the economic calendar.

On the positive side, for the very same reason, gold could still gain its upward mojo. With both the US and Europe far from price stability, monetary policy could remain tight "for some time". As regulators continue to raise interest rates and the money supply shrinks, the economy loses momentum.

As a result, consumer activity falls, consecutively deteriorating the outlook for the corporate sector. In fact, the first signs of a turnaround are already here: two retail giants, Walmart, and Home Depot presented a subdued outlook for this fiscal year. More to come…

The fall in the US consumer confidence index in February to 102.9 from 106.0 in January does not add to the optimism either. If things do not improve, markets could face further waves of risk-off. In other words, more investors will opt to reallocate their portfolios away from risky assets to safe-haven assets, including gold.

Finally, yet importantly, rising geopolitical uncertainty could also affect risk aversion. The threat of sanctions and a general distrust already led to central banks buying 1,136 tonnes of gold in 2022, a 55-year high. Judging by the rhetoric of US officials and political commentators toward China, the trend will continue.

In summary, there are compelling reasons to believe that interest in gold could be more pronounced in H2 under conditions of global political and financial instability. The fragmentation of the global capital market and weak quarterly figures could prompt investors to flock to safe-haven assets.

Author of "Rich Dad, Poor Dad" Robert Kiyosaki, in this sense, predicted the growth of gold prices to $5,000 per troy ounce by 2025. He believes the Fed will be forced to print billions of new dollars, which will lead to a loss of confidence in the American currency and the growing popularity of gold, silver, and even bitcoin.