Why gold prices have reached an all-time high
[ad_1]
On March 5, at the Chicago Mercantile Exchange, quotes for April gold futures increased by more than 0.5%, crossing the mark of $2.1 per ounce. Until now, the cost of the precious metal has never reached such values. Moreover, the growth has continued for the last five trading sessions. During this time, quotes added almost 5%. Analysts say one of the factors is the plans of the US Federal Reserve to move to lowering the key rate. The head of the American regulator, Jerome Powell, announced this, but made it clear that there is still no concrete decision.
Nevertheless, this greatly affects demand, notes Alexey Vyazovsky, vice president of the Zolotaya Plata company: “Such a jump is associated with several events at once. First: the US Treasury added $150 billion in liquidity at once at the beginning of the week through various financing programs. Coincidentally, they also received budget payments, and so on. Part of this money was immediately “parked” in protective assets. Gold is chief among them.
The second development relates to Powell’s recent comments. The head of the Fed is quite loyal to the fact that the rate will be lowered in the future, and gold has an inverse correlation to the cost of capital. We saw an immediate jump after his last comments.
At the same time, the precious metal reached its 50-year highs. In the future we will see a level of 2.2-2.3, which we will fly through very quickly.”
Analysts note that the world’s central banks remain the largest buyers of the asset. According to the World Gold Council, over the past year, high demand for the precious metal from regulators led to a 10% increase in its value. And in January, regulators from different countries more than doubled the total volume of purchases compared to December.
But now geopolitical risks are also coming to the fore, which can lead to long-term growth in quotes, notes BCS World of Investments stock market expert Lyudmila Rokotyanskaya: “We can highlight the geopolitical conflict in the Middle East, which contributes to an increase in inflation expectations. And the second point is news related to the expropriation of Russian foreign exchange reserves by Western countries.
This is indeed a precedent, and it has a huge impact on other countries, they begin to think about diversifying their reserves and, accordingly, buy gold. In January, the world’s central banks more than doubled the total volume of purchases compared to December. Perhaps there are also some gold purchases taking place at the moment.”
Analysts at the German Commerzbank, in a conversation with Reuters, drew attention to the fact that the rise in gold prices occurs simultaneously with an increase in demand for Bitcoin. They also attribute this to interest in anticipation of key rate cuts. However, experts fear that the precious metal could fall sharply in price, as happened on Tuesday with Bitcoin, which reached a record high of $69 thousand per coin and then collapsed to $60 thousand.
Everything is clear with us – Telegram channel “Kommersant FM”.
[ad_2]
Source link
