After the outcomes of the US presidential election have been introduced, the worth of gold, which set a number of worth information this yr, started to say no.
What’s it? Is it a pattern change or a short lived correction? Let’s discover out.
Traditionally, gold has been thought of the very best monetary funding — it’s a dependable bodily asset whose worth has been rising steadily. Nevertheless, with the event of the worldwide monetary market normally and monetary devices particularly, gold started to say no as traders started to diversify their portfolios and take note of different monetary devices.
However the final 20 years, when the world has skilled multiple monetary disaster, have confirmed that gold not solely continues to be one of many most secure belongings, but in addition persistently brings traders revenue. And whereas within the early 2000s a troy ounce of gold value about $400, and on the eve of the 2008 disaster it was about $1,000, in 2011 it was just below $2,000.
In 2024, gold set a number of worth information without delay, and in October 2024-its worth has nearly exceeded the worth of $2,700. World gold demand grew by round 5% within the third quarter of 2024, setting a document and lifting consumption to over $100 billion for the primary time.
The explanations for this course of are fairly world: financial and political uncertainty and instability on this planet, the deteriorating scenario within the Center East, and expectations for the outcomes of the US presidential election. As I’ve already written, in September, the US Federal Reserve minimize its benchmark charge by 50 foundation factors for the primary time since 2020, which led to a decline in US sovereign bond yields, and in early November – by one other 25 foundation factors.
In line with monetary legal guidelines, fast progress is adopted by a short lived decline in costs. This has already occurred within the final decade of October. After the announcement of the US election outcomes, gold continued to fall in worth: its worth dropped to $2600 per troy ounce.
Is that this the ultimate correction? We’ll see. However we shouldn’t write off gold, as it’s more likely to stay a horny instrument for capital safety.
