The price of gold will gather sharply on Thursday and clean the previous record maximum $ 2,954 despite the revenue from the US state treasury and a strong US dollar. At the time of writing Xau/USD, he will clean a 2,960 stamp and reached the highest period of $ 2960 for a troy ounce.
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Gold has played a key role in human history, because it is widely used as a repository of the value and medium of exchange. At present, in addition to its gloss and the use of jewelry, expensive metal is perceived as a safe asset, which means that it is considered a good investment in turbulent times. Gold is also widely considered to be a hedge against inflation and against depreciation of currencies, because it does not rely on any particular issuer or government.
Central banks are the largest gold holders. In their destination to support their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perceived power of the economy and currency. High gold reserves can be a source of trust for the solvency of the country. According to the Gold World Council, central banks have added 1,136 tons of gold worth approximately $ 70 billion to their reserves in 2022. This is the highest annual purchase from the start of the records. Central banks from emerging economies such as China, India and Turkey are rapidly increasing their gold reserves.
Gold has inverse correlation with the US dollar and American cash registers, which are the main reserve and safe assets. When the dollar is depreciated, gold tends to rise and allow investors and central banks to diversify their assets in turbulent times. Gold is also indirectly correlated with risk assets. The assembly on the stock market tends to weaken the price of gold, while sales on more risky markets tend to prefer expensive metal.
The price can be due to a wide range of factors. Geopolitical instability or concerns about a deep recession can quickly escalate the price of gold thanks to their safe condition. As an asset without yield, gold tends to rise with lower interest rates, while higher money costs usually weigh on yellow metal. However, most movements still depend on how the US dollar (USD) behaves because the asset is valued in dollars (Xau/USD). The strong dollar tends to maintain the price of controlled gold, while the weaker dollar is likely to raise gold prices.
