Gold passed $ 4,000 per ounce, the most powerful annual growth of 1979. What are the most aggressive countries to purchase
The gold has exceeded the threshold of $ 4,000 per seed for the first time and continues to grow. In the last seven trading days, the yellow metal has increased by over $ 200, or almost 6%, and the increase at the beginning of the year is about 51%.
Gold is about to record the strongest annual growth of 1979. Goldman Sachs has increased its forecast forecasts, estimating that it will reach $ 4,900 per ounce until December 2026.
The reasons for growth
The generalized global political uncertainty is the one that supports the growth of gold: “The demand for gold as a safe refuge has increased this week, largely due to the prolonged closure of the US government, there is few signs that the Congress political impasse will end soon,” the market participants said. “The bettors on additional discounts of the interest rates by the FED have supported the metal markets, the attention being focused on a series of discourses of the Federal Reserve officials, expected to take place this week, requesting additional guidance,” they added, quoted by the daily Naftemporiki.
US, France and Japan crises
The price of precious metal increased this year more than during the pandemic and recession from 2007-2009. Since the inflationary shock of 1979, gold has not increased so much in a year.
Although this time there was no similar disturbance. Gold has grown vertiginously because of fears that President Trump could overthrow the post -war economic order supported by the US dollar.
Also, the pressure of the white house on the federal reserve to reduce the interest rates threatens the independence of one of the bastions of the financial system. The US dollar had a first half year among the weakest in the last 50 years.
The uncertainty is also fueled by the political crisis in France, which has worsened after the sudden resignation of Prime Minister Sébastien Lecorn. President Macron could convene in advance parliamentary elections, against the background of increasingly frequent calls from the extreme right and left for a change of government.
In Japan, Sanae Takaichi was chosen the leader of the Liberal Democratic Party, in government, and is preparing to become the first woman prime minister.
The “tax pigeon” Takaichi is expected to apply a program based on increased tax incentives and tax reductions.
“The wave of political uncertainty in the developed world, combined with geopolitical tensions, maintained investors focused on gold,” say market participants.
Gold becomes safer than dollar
The central banks bought 415 tonnes of gold in the first half of the year, according to the World Gold Council, and many analysts are expected to continue.
“It is very worrying that investors are starting to see gold as a safer asset than the dollar,” says Ken Griffin, general director of Citadel.
If you want to see which are the most aggressive 10 countries that bought gold this year you can do it by subscribing to Economix, the newsletter we deliver every Thursday morning at 7 o'clock. The first 3 places are occupied by Poland (which had the ambition to have a larger gold reserve than that of the European Central Bank), Kazahstan and China
People are looking for ways to “dedolize” their portfolios effectively
“We notice a significant increase in other assets in relation to the dollar, as people seek ways to” dedolize “their portfolios or reduce the risk,” Griffin said in an interview with Bloomberg.
Investors often orient themselves to goods such as gold, refuge currencies such as Swiss franc or assets related to the growth of other savings, seeking protection from what was once considered the strongest active in the world: the dollar.
Wall Street giants begin to express their concern about this trend, which could mark a turning point and trigger global changes.
The China factor
At the same time, the Central Bank of China has increased its gold reserves in September, expanding its purchases for the eleventh consecutive month.
The gold reserves of the People's Bank Chinese totaled 74.06 million ounces at the end of September, increasing compared to 74.02 million in the previous month. The value of the gold reserves of the PBOC has also increased significant in September, against the background of an increase in the prices of precious metals.
Americans are no longer tired of gold, writes Wall Street Journal. Costco, who started offering gold bullion last year online and in a few stores, exhausted the stock in a few hours. Consumers have evaluated gold as a better investment than mutual actions and funds, for the first time in the last decade, according to a Gallup survey.
