Gold price: what trends will dominate the price in the coming months?
Stable value
Posted by MoneyController on 19.02.2024
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The price of gold has stabilised above $2,000 for some months now. It is difficult to predict where the price will go today, as recent data on US inflation has made many analysts less confident of an imminent interest rate cut.
The price of gold and interest rates, or rather gold and the dollar, are two assets that tend to be inversely correlated: when the dollar depreciates, gold, which has a reference currency in the greenback, tends to appreciate, precisely to preserve the intrinsic value that savers recognise in it as a safe haven asset.
In any case, it is certainly interesting to note that the interest of one group of savers/investors traditionally loyal to gold, namely German savers/investors, seems to have decisively lost faith in gold's ability to protect their investments within the space of a year: as can be read in an article by Victor Gojdka published in the Süddeutsche Zeitung, the World Gold Council has recorded a 75% drop in demand for gold bars and coins in Germany.
Part of the sales, the article suggests, could be due to the price of gold, which has been steadily above €1,800 an ounce for the past three months. However, the Süddeutsche Zeitung also notes that there are markets where gold is still in demand, such as China, where jewellery purchases are up 10% and demand for gold coins and bars is up 30%.
As Sandra Riccio reports in an article for La Stampa, Benjamin Louvet of Ofi Invest AM points out that when analysing gold prices, it is important to bear in mind that price movements are influenced by two opposing forces: geopolitical and economic uncertainty on the one hand, and inflation on the other. On the other hand, rising interest rates are making certain financial products offering non-fixed returns more attractive, which is pushing many savers/investors to sell non-coupon assets (such as gold).
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