This coincides with comments from others who have tracked gold for decades, as well as with the 8-fold increase in gold recorded after the stagflationary period of 1973-74. Currently, the price of gold is rising because there is a clear need for safe investment, enet. We have seen federal rate cuts and stock market declines. This has made investors seek to invest their money in safer investments, such as a Physical Gold and Silver IRA. Of course, there are factors that must be considered for long-term gold price forecasts that are often unpredictable, such as mining supply or geopolitical tensions. According to Weinberg, investors would not invest in gold out of fear of geopolitical risks or a total loss of assets, but the precious metal would currently serve as capital protection for them, out of fear of low interest rates.
According to the analyst, central bank monetary policy, inflation, risk differentials, current economic developments and reactions to political risks are generally essential for the evolution of the price of gold, since gold has the status of a safe haven in crises. And finally, since gold is an uncertain supply that is extracted, it is actually mostly recycled, so when global demand increases, it is difficult to meet supply, so demand causes the price of the asset to rise considerably. In the long term, analysts expect demand for gold to increase due to strong growth in emerging markets and that the “wealth” channel will end up dominating demand for gold. Societe Generale assumes that in recent years a bubble has developed in gold prices, which will be followed by a bear market.
A rise in the inflation rate could increase investor fear of higher inflation rates in the long term, which in terms of terms could boost demand for gold as a hedge against inflation. Nominal rates are proving to be a special drag on investment demand in the metal, since they would increase the cost of storing gold. In addition, the debt crisis in the eurozone and the geopolitical risks in the Middle East are considered to be important factors for a sustained demand for gold as a “safe haven”. Goldman Sachs precious metals analysts assume in a study that the price of gold will continue to rise next year due to economic and financial uncertainties.
According to Deutsche Bank, due to the announcement of an open quantitative easing program by the Federal Reserve, an increase in the price of gold is only a matter of time. To see even greater demand for gold and a stronger rise in prices, analysts expect investors to have to worry about their wealth again. For this year, analysts had generally neutral expectations regarding the price of gold; no major changes are expected compared to the average price of gold the previous year. Emphasizing the attractiveness of gold as an asset for good and bad times, most investors would buy gold regardless of whether the national economy was growing or in recession.
For example, if you think there is a bull market for gold, you can add a little more to your gold stocks. The price of gold is also likely to be supported by the revival of demand in China and inflows to gold ETFs.