The record price that gold has reached, and consequently the token $PAXG , is the result of a confluence of economic and geopolitical forces. The main driver of this golden rally is the declining real interest rates. When the interest rates that investors receive for assets like bonds are low (or even negative) after adjusting for inflation, gold becomes much more attractive. Gold does not offer a direct return, but in a low-rate environment, its opportunity cost decreases dramatically, boosting investment demand.
A second fundamental factor is the weakness or volatility of the US dollar (USD). As gold is priced in dollars globally, a strong dollar makes the metal more expensive for buyers using other currencies, which often puts downward pressure on the price. Conversely, the recent downward pressure on the dollar has been a direct catalyst for the rise in the price of gold and PAXG. The monetary policy decisions of the US Federal Reserve (Fed) regarding rates are, therefore, a constant and crucial influencing factor.
This is compounded by geopolitical uncertainty and global instability. Conflicts in the Middle East, trade tensions, and concerns about the sustainability of global debt have reinforced gold's role as the ultimate safe-haven asset. Investors seek it to protect their capital against unexpected crises and a potential loss of confidence in fiat money.
Finally, there is very strong structural support coming from record gold purchases by central banks around the world. These institutions are actively diversifying their reserves, moving beyond the US dollar. This official demand is a structural and long-term component that provides a solid foundation for the price, regardless of short-term retail market speculation.
In summary, the price of PAXG is firmly supported in a scenario where real interest rates are unattractive, the dollar is under pressure, and global uncertainty drives large players and investors to seek refuge in physical gold. #BTCVSGOLD #Write2Earn
