Price of gold rises


In recent days the commodity market has seen a rise in the price of gold, when it traded above US$ 1,800 per troy ounce, but precious metals experts warn that there are more and more reasons why the price of gold will not rise further. On the other hand, there are analysts and financial strategists who claim exactly the opposite and are convinced of the continuing rise in the price of gold. However, both these groups of experts agree that the development of the price of gold is influenced by fundamental factors such as global economic growth, the development of global inflation and the exchange rate of the US dollar (USD).

According to these precious metals experts, all three basic factors that largely affect the price of gold on the global commodity market are more of a market manipulation, depending on the attitude of large central banks and their monetary policy. In this context, the most mentioned is the US Federal Reserve System (Fed) and the exchange rate of the USD and its monetary policy such as economic incentives in the form of bond repurchases or interest rates, etc. Another important factor is the constantly deepening deficit of the state debt of the United States, but also of other global economies, which, according to these financial strategists, then creates a space for inflation to rise. In this context, these experts ask themselves the fundamental investment question of whether the current movement in the price of gold is enough to offset the inflation burden as an investment tool.

On 9 November 2021, around 5:30 am CET, investment gold traded on the Commodities Exchange Center (COMEX) global commodity market at US$ 1,825.20 per troy ounce with the daily decrease of -0.15% of its price. According to analysts, the change in the business trend was caused by the investors’ profits withdrawals, which they achieved in the previous period. However, the current price still did not offset its losses attained this year and technical analysis data show a price decrease of -4.83% since the beginning of 2021. In the overall comparison the price of investment gold shows an annual loss of -3.44% in the last 52 weeks. What these experts agree on is that the development of investment gold prices is much slower than in the period before the outbreak of the global SARS-CoV-2 viral pandemic.

In this context, the development of the price of gold and its anti-inflationary character, the latest data of technical analysis show that gold ceases to reliably fulfill its function of the precious metal as a preserver of lasting financial value. According to financial strategists and investment analysts, most dynamic investors consider virtual currency – cryptocurrency and especially the most widespread cryptocurrency Bitcoin (BTC) to be this anti-inflationary investment tool. Bitcoin has become an instrument for a large number of dynamic investors, who are willing to take considerable investment risk, for securing their funds against inflation. The opinion of these experts is that the catalyst for the current failure of gold as an investment instrument, is the US state budget deficit, where GDP and tax revenue management is the easiest way of stimulation, which means inflation.


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