Is it worth buying gold now? The expert indicates the condition
Gold has been going up in price like crazy in recent months, and we paid 100% for an ounce of the precious metal. more than a year ago. A raw material that was recently worth approx. PLN 2,000. dollars, within a few months it increased to as much as PLN 5.4 thousand. hole.
We asked the expert whether this is a good time to invest in this metal. The answer is not clear.
Read also in BUSINESS INSIDER
Gold prices down. What's happening on the market?
Just a week ago, on Monday, the precious metal was valued at approximately PLN 5,000. hole. per ounce, and this level, with minor fluctuations, remained throughout the first days of the week. On Wednesday, the declines began and continue to this day.
Effect? Currently, the precious metal's valuation on Monday morning was $4,153. per ounce, which is clearly visible in the chart above. Later there was a slight rebound, but at noon the price was around $4,250. That's over 1 thousand. hole. less than at the beginning of the month.
XTB analysts, in a comment on last week's changes, pointed out that “the sell-off is taking place in conditions of increased geopolitical uncertainty and stagflation risk, which theoretically, they should support demand for precious metals – especially gold. Nevertheless, metals are falling like classic momentum assets, along with bonds and equity indices. Here it is worth pointing out an important driver in the form of accelerated profit realization.
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It is worth emphasizing that gold closed last week with a 10% increase. decline in value on stock exchanges, which is the worst result in over 40 years. Reuters wrote about it.
“It was asking for a correction”
— The price of gold and silver was definitely going up, and that's never good. Usually, even with the escalation of armed conflicts, we see increases, but not that dynamic – Dorota Sierakowska, investor, raw materials analyst and CEO of MoneyEd, tells Business Insider.
As he adds, “after such great dynamics “It was so purely technical that it begged for a correction”. – There comes a moment when even individual investors wonder whether they have missed their chance to make money on gold – explains our interlocutor.
At the same time, he states that he does not expect any “collapse” on the market. — We still have high demand, central banks are buying more gold. The correction does not mean that all the gains from recent months will be erased, says Sierakowska.
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So why the declines, since gold has always been a “safe haven”? The situation in the Middle East is far from calm. Quite the opposite.
— The conflict undoubtedly increases market risk and uncertainty, but it also contributes to higher inflation expectations. And then there is also pressure for higher interest rates or at least not lowering them, which is not good for precious metals. Higher interest rates automatically mean better interest rates on other instruments that are competitive with gold. For example, deposits or bonds indexed with inflation – explains the analyst.
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He also adds that the declines may be the result of some investors simply wanting to make profits in a purely speculative manner.
So we ask Is it a good time to buy gold at a better price? — Speculatively, it's a big risk because the volatility is still significant. But if someone was considering expanding their long-term portfolio, taking advantage of lower bullion prices may make sense. However, it is worth taking into account that getting the perfect moment is extremely difficult – says our interlocutor.
