The price of the yellow metal has lost 20% in three months. And some say the decline is not over.
Gold is shining a little less brightly. But still much more than a couple of years ago. After hitting a record high of $5,600 an ounce (about €180 per gram), it has lost 20%. Today, the metal’s market price is hovering around $4,117, the lowest level since March 23. So much so that some industry players expect further declines. The downward trend has surprised many, given that gold is considered a safe haven, especially when international tensions erupt. However, since the United States and Israel attacked Iran (late February), the yellow metal has begun to reverse course. This is also due to selling by some central banks.
This is good news for those looking to purchase gold jewelry, although price movements on the trading list aren’t immediately reflected in the price of the jewelry. In any case, the largest American bank, Citi, predicts a further drop below $4,000, possibly reaching $3,500 if transits through the Strait of Hormuz don’t resume by the summer. Essentially, gold could fall roughly to its levels of a year ago. These levels, however, remain much higher than the $2,000 it seemed to be pegged at in previous years. But beware: the same bank predicts that once the Persian Gulf crisis is resolved, gold could return to January levels.
According to one analysis, gold is being impacted by fears of inflation linked to energy costs, caused by rising oil prices. If the cost of living rises, the yields offered by bonds also rise, thus draining investments that would have been earmarked for the yellow metal.
