Gold has reached an all-time high: will it continue to rise? Or was it just a blaze destined to go out? The answer interests both the world of jewelry and those who invest in the yellow metal. Everyone knows that the future is unpredictable even for the most experienced analysts. However, it is possible to draw a picture that can offer some indications.
At the beginning of March, gold prices in New York exceeded 2,140 dollars an ounce, with a peak of 2,145.40 dollars. Yet the previous record had been reached only three months earlier: on 4 December the value of gold had risen to 2,135 dollars, but then fell. The fundamental point, however, according to experts, is the exceeding of the 2,000 dollar mark in mid-February: a psychological threshold, which opens up to any scenario, so much so that in a week the yellow metal has increased by around 100 dollars.
Why has the value of gold risen so much? There are two main factors: the geopolitical tensions that push towards safe haven assets and the maneuvers of large investment funds. The first factor is simple to understand: war in the Middle East, war in Ukraine, American elections which can be a factor of further uncertainty. Reasons that push many investors to bet part of their money on the solidity of gold. This factor conditions some investment funds which, also due to the algorithms that determine portfolio choices, join the trend. In this way they further fuel the rise in prices.
Warning: it is not an automatic mechanism, destined to repeat itself forever. Another aspect that affects the price of gold is, for example, the trend in interest rates. Investors expect the Federal Reserve, the American central bank, to reduce rates as inflation appears to be under control. This expectation affects the yield of American government bonds and the price of the Treasury Bond has already partly reflected these expectations. If the value of bonds falls, many investors think, an alternative is to buy gold. Of course, if the Fed were to not lower rates and the wars around the world were to end or, at least, find a truce, gold would probably lose part of its appeal, with a reduction in prices.
