The Wall Street Journal (WSJ) reported on the 26th (local time) that international gold futures prices have risen for the past six consecutive weeks, exceeding USD 1940 per ounce. The figure is up 20% from its low point in September last year. If gold prices continue to rise and exceed the $2,000 mark, the highest ever price of $2069 will also be within range.
Gold investment is considered a representative risk-averse measure during inflation, but it received little attention last year despite the worst inflation in more than 40 years. Analysts say this is due to an increase in investment demand for U.S. government bonds due to the U.S. Federal Reserve’s (Fed) base rate hike.
For investors, U.S. government bonds are more attractive than gold because they are comparable to gold in terms of safety and can even raise extracurricular profits of interest. The dollar’s strength last year was also cited as a factor that hampered foreign investors’ investment in gold.
However, as interest rates on U.S. government bonds have recently fallen and the dollar has weakened by about 10% compared to September last year, demand for gold has spread. China’s recent abolition of the “Zero Corona” policy is also considered a positive factor in the rise in gold prices. As a result, hedge funds and other speculative investors have recently flocked to the gold futures market.
In addition to gold, the price of precious metals such as silver and platinum also rose. In the case of silver, it has risen 25% and platinum has risen 15% over the past three months.
However, experts point out that there are many variables along with the prospect that gold prices will exceed the all-time high this year. Jim Steele, a senior analyst in HSBC’s precious metals sector, said gold investors would be disappointed if the Fed did not cut interest rates even if it began to pace itself in the future, adding, “Demand for gold investment will decrease.”