The price of gold has set records in recent months, which is not only a financial phenomenon, but also an indicator of the state of the global economy. According to analysts, the rise in the price of the precious metal is a reflection of a slowdown in economic growth, which could lead to a reduction in interest rates by the end of the year.
Investment analyst Zdravko Pirinliev claims that the record rise in the price of gold is due to geopolitical tensions and the slowdown of the American economy. “If this trend continues, it will put pressure on the Federal Reserve to lower interest rates.” The trend in Europe is the same as it is in America, namely to lower interest rates,” comments Pirinliev.
According to other experts, the high price of gold is not the result of an increase in the price of the metal itself, but of the depreciation of the currencies in which it is valued. Max Baklayan, CEO of an investment gold company, explains that the continuous printing of unbacked currency leads to inflation, and gold is a barometer of its presence.
Thus, the price of gold becomes a direct indicator of the state of the economy. According to experts’ analysis, the higher the price of gold, the more unhealthy the economy. This makes many investors worried about the possibility of a recession or other turbulent market processes.
Interestingly, in the first quarter of 2024, central banks purchased nearly 290 tons of investment gold. This is an important signal as it shows that even central banks prefer gold over currencies like the euro. For the first time, gold has surpassed the euro as the asset held on balance sheets by central banks.
2024 is the first year in which gold overtakes the euro as the largest asset held on central bank balance sheets. In reality, central bankers say they trust gold more than the euro, say experts.
Interest in investment gold is also growing in Bulgaria. According to data, Bulgaria ranks third in Europe after Germany and Poland in terms of the amount of gold purchased per capita in relation to the gross domestic product. In the first half of 2024, sales of investment gold in the country increased by 10% compared to the same period last year.
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