Investors trading gold on the commodity market, who assumed a continuing upward trend in the price of investment gold, are now counting their losses. During the 7th week of this year, the price of gold fell below US$ 1,800 per troy ounce, and according to technical analysis data, the value of investment gold has lost -6.53% of its price since the beginning of 2021. Nonetheless the price of investment gold maintained its positive balance and the value of gold increased by +9.06% over the last 52 weeks.
On 18 February, investors remained bullish on gold and at 7:14 am CET its value increased by +0.47% and reached a value of US$ 1,781.10 per troy ounce. There is now widespread controversy among analysts and financial strategists over whether the price of US$ 1,772.80 per troy ounce is the price from which the value of investment gold will rise again. However, the current decline in investment gold represents the lowest price of gold since June 2020, and some analysts believe that this is not yet the price bottom.
Investment gold reached current prices in a situation where the exchange rate position of the US dollar (USD) on the international foreign exchange – Forex market slightly weakened. On 18 February at 7:53 am CET according to the US Dollar Currency Index (DXY) – which compares the USD exchange rate with the other six major world currencies – the USD was seen at the price level of 90.93 with a current daily decrease of -0.02%. At the same time, the trading trend of the global currency pair EUR/USD, which traded on the Forex market at a mutual exchange rate of US$ 1,204 per EUR, changed with the current daily strengthening of the EUR by +0.06% against the USD. This caused a slightly higher interest of investors in buying gold.
The current situation regarding pandemic and the already successful vaccination against this disease has changed or corrected investment sentiment into a more positive investor mood. According to analysts, this is due to the fact that some countries are already loosening their measures, which affect the economy negatively, and other countries will soon introduce some relaxation of restrictions as well. As a result, according to financial strategists, the price of gold has reached a defensive position and investors’ interest in so-called consumer financial instruments has increased, sometimes with a higher level of investment risk such as stocks, but especially bonds. According to these experts, it is less likely that the price of gold will return to close to US$ 2,000 per troy ounce, unless a sudden investment shock on the global financial market comes.