This summer, the price of gold is relatively low, however experts are still confident that the precious metal does not lose its appeal. Analysts explain that at a time when a geopolitical risk benefits the US dollar, gold gets affected.
"For example, the price of gold decreased by nearly 30% during the global financial crisis. The dollar’s price, on the contrary, increased. The price of gold only started rallying towards the end of 2008. This happened after the Fed has lowered the interest rates, based on the mitigation policy, which led to a sharp decline of the dollar," argues Capital Economics analyst Simona Gambarini.
On Monday, 20th of August, the price of an ounce of gold began to recover and approached the $1,190 mark.
On Tuesday, 21st of August, gold, as the global currency, still looks appealing, according to analysts of the German company Degussa that specializes in production and sales of gold bars. Within a week, the precious metal’s price increased by 1% per day on average.
"The yellow metal offers an excellent opportunity for those who want to build up their long-term gold positions," analysts note. Perhaps now is a historic moment, a lesson to be learnt is that everything that is currently undervalued will be corrected over time."
The price of gold increases, reaching the level of $1,196 per ounce.
On Wednesday, 22nd of August, important negotiations on trade issues between China and the United States began.
As experts say, any negative news about the course of the dialogue with China can immediately affect the price of the precious metal.
Over the week, the dollar fell by almost 3% against the euro, which was the main factor in the increase of gold prices.
On Wednesday, pending the minutes of the Fed’s meeting, the price of the yellow metal was $1,195 an ounce.
On Thursday, 23rd of August, China imposed increased import duties on the US goods. This is the second round of tariff increases, which only strengthens the accusations of the countries to each other.
Against the background of unsuccessful negotiations, gold was under pressure again.
In the annual report Gold Pipeline, experts of the S&P Global note that despite economic instability, global production of gold will reach new highs in 2019 and 2020.
Analyst Chris Galbraith predicts a further increase in gold mining activities up to 111,7 million ounces of gold in 2020.
On Thursday, the price of gold was $1,185.
On Friday, 24th of August, Bank of America Merrill Lynch issued a statement, expecting the strengthening of the US currency not only in late August, but also in September. While China called the negotiations in Washington sincere and constructive, the White House continued to oppose Beijing's actions, which contribute to the destabilization of international relations. The date of discussion of the further development of events has not been announced, but experts suggest that the next round of negotiations will be certainly conducted.
The revival of the market impacted the price of gold.
On Friday, the price of the precious metal was $1,206 per ounce.
On Monday, 27th of August, gold was worth $1,207 per ounce.
The long-term perspectives for gold are still solid, and gold prices are expected to increase up to $1,300. ICBC Standard Bank commodities strategist Marcus Garvey believes that it will take no more than six months for a substantial price growth. Specialists of the ABN Amro note that the price of the precious metal will hit the $1,250 an ounce mark in December, rising up to $1,400 by the end of next year.
GOLD IS THE FOUNDATION OF FINANCIAL SECURITY.
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