Even the most “hawkish” policy of the US Federal Reserve over the past decades cannot suppress the enthusiasm of the gold mining industry, writes Bloomberg.
According to a survey of participants in the industry’s largest annual meeting, the Denver Gold Forum, they expect the price of the precious metal to rise to $1,806 per ounce by the end of this year. This is 7.8% higher than the level at the close of trading on Monday. The last time gold rose above $1,800 an ounce was in early July.
Investors from all over the world, including central banks, still want to make strategic investments in gold, notes Joseph Cavatoni of the World Gold Council. “In addition, geopolitical risks will keep gold at the center of every investor’s attention,” he said.
Gold prices held above $1,700 an ounce for most of September but fell last week on expectations that the Federal Reserve would raise interest rates by at least 75 basis points on Wednesday.
The tightening of monetary policy to curb inflation led to an increase in interest rates and an increase in the US national currency. Both are bad news for gold. “The choice is clearly in favor of the US dollar,” said the chief executive officer of Wheaton Precious Metals Corp. Randy Smallwood.
However, gold is supported by geopolitical tensions in the world, including a full-scale war unleashed by Russia against Ukraine. The energy crisis in Europe and China’s “zero tolerance” policy in the fight against COVID-19 indicate the likelihood of a slowdown in the global economy, which could also encourage investors to increase their investment in gold as insurance, Bloomberg notes.
“This is a defensive asset during a period of macroeconomic and geopolitical uncertainty,” said the executive chairman of Yamana Gold Inc. Peter Marrone.
December contracts for gold on the NYMEX rose 0.3% during trading on Tuesday – up to $1682.9 per ounce.
