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Gold Rush Continues: Time to Buy More or Take Profits?

Gold's record-breaking surge continues, with the precious commodity now up close to 40% over one year, outpacing the stock market's benchmark, which gained 32% over the same time. As gold ETFs and several gold mining stocks soar, the question arises: Is now the time to buy, or should investors wait for a pullback?

What's Driving the Gold Rally?

Much of gold's rise has been driven by uncertainty in global markets, escalating tensions in the Middle East, and ambiguity surrounding the Federal Reserve's monetary policy. However, in recent weeks leading up to the first interest rate cut, the price of gold surged, primarily due to easing inflation and expectations that the Federal Reserve will cut interest rates. Data had signaled a slowing U.S. economy, causing investors to flock to the perceived safety of gold. With inflation nearing the Fed's 2% target, gold again emerged as a preferred hedge against potential economic turbulence.

The weakening of the U.S. dollar has also contributed significantly to gold's rise. A weaker dollar makes gold more attractive to foreign buyers, increasing demand. Additionally, expectations that the Fed will continue cutting rates have further pushed the price of gold upward. These dynamics have supported the precious metal's rally and boosted silver, ...