Gold is often described as an inflation hedge, but has yet to make any major moves higher. then why? What are the expectations for next year?
says the report on the siteOil price(Oil Price): While the price gains will be very welcome to real gold investors, the true value of the precious metal is likely to become apparent over the coming months and years.
He adds that for those unfamiliar with monetary history – who are the vast majority of the population – it is natural to ask: if gold was an inflation hedge, why hasn’t it risen now that inflation has reached record highs? ?
Important questions and many reasons
There are several reasons for this, some more obvious than others, and the report considers interest rate hikes by the Federal Reserve (Central Bank of America) and repeatedly increasing them is perhaps the most obvious explanation.
It is believed that this is the answer that most economic experts and analysts will give you. This makes sense, if gold doesn’t pay you any interest for holding it, why not hold something that interests you? This is the mindset of most investors which weakens demand, which in turn leads to lower prices.
And it confirms that the obvious question is: has gold performed below standard this year? The answer is: if you’re saving, getting your paycheck, and paying your bills in a currency other than the dollar, then chances are you have a completely different view on this issue. Gold is up in the euro by about 6 .6%, and over 45% in Egyptian pounds, for example, demonstrating the importance of the viewing angle.
For those who can see the bigger picture, it’s not the value of gold that fluctuates, but the value of the notes used to buy it without the dollar, according to the report.
The report asks: Instead of trying to predict what central bankers will do and how it might affect the gold market, wouldn’t it make sense to look at what they’ve done instead of what they say?
He believes what central banks did in 2022 speaks volumes, as they have built up gold reserves at an unprecedented rate since 1967, when the dollar was still backed by the precious metal.
Forecast for next year
The report shows that there are plenty of reasons for concern next year as the conflict in Ukraine shows no signs of stopping amid expectations that high inflation will continue to hurt the real economy, and says: Even if the index of consumer prices falls, families are still feeling the effects of the crisis. .
He believes that as countries become more desperate and cannot find a way out of the financial, monetary, social and political hole they have dug themselves, they will surely become more aggressive.
And he adds: Threats to financial sovereignty, the seizure of power and increased surveillance and control over private assets and savings are likely to become more serious. Under these circumstances, gold appears and shines as a solution to this crisis.
Against this background, the report said that in early December, Saxo Bank was expecting a “tight” gold price of $3,000 an ounce, in a more “extreme” scenario for what the bank described as a ” war economy” in the world, as every country tries to strengthen its national security at all levels.
Interestingly, gold prices rose 0.2% over the past week to reach $1798.45 an ounce. The price of the precious metal is falling for the second consecutive year.
