The price of gold has reached a record summit of more than $ 4,000 (£ 2,985) an ounce while investors are looking for safe places to express their money on concerns about economic and political uncertainty in the world.
Gold has seen its biggest rally since the 1970s, increasing by more than 25% since April, when US President Donald Trump announced prices that have turned upside down world trade.
Analysts claim that another problem is concerned about investors is delays in the publication of significant economic data due to the closure of the United States government because it is expected to enter its second week.
Gold is considered to be a so -called refuge investment, which should keep or increase its value of market turbulence or economic slowdowns.
The price of spot gold – The amount you receive if you sell the precious metal on the counter – exceeded $ 4,011 per OCE on Wednesday morning in Asia.
Gold Futures – which serves as a market feeling gauge – reached the same level on October 7. Under -term contracts are agreements to buy or sell the assets on a predetermined date in the future.
The closure of the American government, which has been triggered by repeated dead ends on public spending, is a “back wind for gold prices”, said Christopher Wong of OcBC, which is the strategist of the tariffs of the Bank based in Singapore.
Investors turned to Safe Haven assets as gold in previous closures in the United States government.
He increased by almost 4% when closing a month when Trump’s first term in the White House.
But gold prices could drop if the stop ends faster than certain investors await it, said Wong.
Gold’s “unprecedented rally” in the last month, exceeded analysts’ expectations, said Heng Koon Heng Koon, UOB Bank markets.
He added that this increase is also linked to the weakening of the US dollar and to non -professional buyers, known as retail investors, buying gold.
Gregor Gregerson, the founder of the precious metal merchant and Silver Bullion storage supplier, said that he had seen client figures more than double in the past year.
Retail investors, banks and rich families have turned more and more to gold, considering it a safeguard against global economic uncertainty, he said.
“Most of our customers are long -term holders,” added Mr. Gregersen, explaining that the majority of its customers store their gold for more than four years.
“Gold will fall at some point, but I think that in the economic environment, it is on an upward trend for at least five years,” he said.
As Mr. Gregersen pointed out, gold prices drop as well as the increase.
Its price can drop if there is an increase in interest rates or geopolitical tensions and facilitated political uncertainties, said Wong of OCBC.
In April, for example, the price of gold fell by about 6% after Trump fell from the dismissal of the president of the Fed, Jerome Powell, he said.
“Gold is often considered a hedge against uncertainty, but the cover can be unrolled.”
And in 2022, gold Value plunged $ 2,000 to $ 1,600 per ounce, after the American central bank increased interest rates to slow down the inflation that was triggered by the COVVI-19 pandemic, said Mr. UOB. Heng.
A key risk for the current Gold rally is a sudden resurgence of inflation, which could encourage the federal reserve to increase rates, he added.
The recent ascent of gold prices reflects expectations that the Fed will lower interest rates, which makes gold more attractive, said Wong.
Meanwhile, Trump increased the pressure on the Fed, publicly criticizing Mr. Powell so as not to reduce rates fairly quickly and try to dismiss the Fed governor, Lisa Cook.
The targeting by the president of the Fed can “undermine confidence in the (SA) capacity to act as a credible central bank of inflation targeting,” said Wong.
In such an environment, the role of Gold as a coverage against uncertainty “gains renewed importance,” he said.
