In the financial field, Gold is the safe haven asset par excellencethanks to the fact that it tends to retain its value even in situations of uncertainty. In fact, the price of this metal is going through one of its best moments, as in just under two weeks it has already broken its historical record.
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For the day of August 16, the price of the ounce exceeded 2,500 dollars and on Tuesday, August 20, Its value was already at $2,519.
The increase is more significant when you consider that it went from being worth $1,800 at the beginning of 2024 to reaching its all-time high in July, month in which it reached almost $2,484 per ounce.
Experts point out that the increase in demand for gold is due to forecasts regarding interest rates. In this sense, estimates are that The US Federal Reserve (FED) could start cutting rates in Septemberdue to the moderation in the inflation figure.
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Gold
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The upward trend in the price of this metal also is associated with growing geopolitical risksas well as a greater flow of purchases by central banks, which generally turn to this asset to ensure financial stability.
To the above is also added the increase in purchases by Chinese consumersespecially from private investors. China has also turned to the asset as part of its strategy to reduce the dollar’s dominance.
Gold
PHOTO: iStock
Safe investment?
The first thing to understand is that the demand for gold It tends to increase in times of geopolitical and economic instability.
However, as Duke University finance professor Campbell R. Harvey explained to DW, the performance of this asset does not necessarily always result in a safe investment. “For example, during the Covid-19 pandemic, the stock market fell, bitcoin fell, and the price of gold was also affected downwards,” Harvey said.
However, It remains an attractive option for those seeking stability in times of uncertainty.
(See: The copper ‘rush’: the reasons why the demand for this metal has skyrocketed)
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