The price of gold, considered a safe haven asset in times of uncertainty, has risen at the opening this Monday and marks a new all-time high, trading above $2,087 per ounce. One hour after opening the markets in Europe, it is trading at $2,088, although during this morning it has risen to $2,135.39 per ounce.
Last Friday, the gold metal already surpassed the record reached in August 2020, at $2,075, due to the doubts among investors due to the pandemic, as well as the war in Ukraine. In the accumulated value of the year, there is a revaluation of 14.29% thanks to the impulse of the weakness of the dollar and the fall in bond yields, which “already discount a change in monetary policy by the central banks,” according to what it points out. XTB analyst, Joaquín Robles.
The rise in the precious metal is explained by the increasingly distant perspective – and even supported by the comments of some members of the central banks – that interest rates will be cut next year, with the Federal Reserve (Fed) of the United States being able to United States starting the cuts in mid-2024 and reducing them by up to 100 points by the end of the year, according to some firms and analysis houses. Gold and the dollar maintain an inverse relationship; That is, a strong dollar makes gold cheaper – since it is quoted in this currency – and a weak dollar makes it more expensive, since more “greenbacks” would be needed to pay its price.
In the current year, the precious metal has surpassed the symbolic level of $2,000 on several occasions, such as last October due to the outbreak of the Palestinian-Israeli conflict, while its previous annual maximum was $2,063. reached last May due to the tension in the Ukrainian conflict and the shocks derived from the US regional banking crisis as well as the bankruptcy of Credit Suisse last March.
In this context, the fintech Ebury has published a report in which it points out that the adjustment of expectations regarding an upcoming rate cut in the eurozone could cause further falls in the euro and a correction of the currency in the short term, in so much so that this afternoon the community currency was trading at $1.08.
The entity’s experts have stated that with inflation on a “clear disinflationary path” and the eurozone economy on the brink of recession, markets are increasingly confident in a first rate cut by the ECB in the spring. In fact, according to their diagnosis, the markets are already pricing in a first drop of 25 basis points in the April meeting next year and a total of 100 basis points of cuts for the October meeting – which would take rates to around 3 %-.
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