It’s a gold rush: in times of economic uncertainty, citizens, hedge funds and public bodies stock up on gold to protect capital from market shocks or to do business. The price of gold in the last few hours it has reached altitude $2,043.47 per ouncewith an increase of +0.12%.
Why the price of gold rises
The psychological threshold of $2,000 an ounce was breached last October 27th in London, then in the following days there was a fluctuating trend. Today comes a new strong upward bounce.
2023 was a perfect storm, a succession of economic shocks, some of which with catastrophic effects.
There are two ongoing wars: Ukraine-Russia and Israel-Hamas. The first, in particular, has upset the economic balances of the food market and has long upset the balances in the oil and gas market, with heavy repercussions on prices and production.
All this happened while the world economies are still feeling the effects of the long wave of the pandemic which has pushed out of the market companies that seemed very solid and which instead collapsed. An example for everyone is that of WeWork, a smart working giant that promised to change the world.
But 2023 is also the year of cuts in Big Tech (LinkedIn, Amazon, Nokia, etc…), directly or indirectly listed on the stock exchange, which cut tens of thousands of employees over the course of the year. But the Chinese economy has also suffered hard blows, such as the deflation bubble and the bankruptcy of Evergrande.
Who invests in gold today
All this has pushed thousands of small investors and dozens of hedge funds to buy gold. But not only that: governments have also restarted the gold rush in style, bought in the order of tens of tons, to inflate their gold reserves and protect their economies as much as possible from market shocks. And this is precisely the main reason for the surge in the price of gold: the countries that have bought the most gold are China, Poland, Turkey, Singapore, India and a series of countries in the Middle East.
The elementary law of supply and demand explains that the more coveted a good becomes, the more prices increase.
Is it worth buying gold now?
Answering with 100% accuracy the question of whether it is worth buying gold now is an exercise that falls more into divination than market prediction. Already when gold had reached 2,000 dollars an ounce, experts were divided between predicting that the maximum ceiling had already been reached and advising to sell and those who instead suggested waiting because the international situation could worsen further. Buying gold now depends on your risk appetite and the bet on a further worsening of the economic and geopolitical crisis.
Those who intend to buy gold, physical or via trading, are reminded that among the expenses to consider there are also commissions and capital gains taxation of 26%.
2023-11-29 21:38:00
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