The growth of gold in rubles turned out to be a record at all: one gram of the 999th test went up in price by 1000 rubles in Russia, breaking the mark of 4000 rubles.
If we take into account that only five months have passed, then the current indicator should be considered truly outstanding. Recall that for the whole of 2019, the gold exchange rate rose by 25% in the context of the trade war between the United States and China, as well as the weakening of the monetary policy of the Fed.
The rally continued in 2020 against the background of the approaching world recession due to the COVID-19 coronavirus pandemic. Therefore, precious metal behaves quite predictably: rising in price, when other exchange-traded assets fail due to the crisis. What else is connected with the rally of precious metals?
Gold is not a productive asset. Its profitability is determined only by the appreciation. Yellow metal is a protective asset that investors use to preserve their savings and capital. In a world where trillions of dollars and other paper currencies are created at the behest of the Central Banks, it is gold that manages to maintain its profitability and not suffer from inflation. The stability of precious metals as a means of saving and the form of money is confirmed by the experience of mankind: for more than three thousand years, since the time of the Egyptian pharaohs, gold has been considered a metal incomparable in its usefulness and beauty.
When the latest version of the gold standard, adopted after World War II in Bretton Woods (USA), fell victim to the economic shortsightedness of the authorities in 1971, the yellow precious metal began to be freely traded, and its rate increased on average by 10% per year. Since then, gold has been a sure indicator of the declining purchasing power of paper currencies.
From an investment point of view, gold remains a reliable protective asset in unstable times. It is especially in demand in conditions of economic recessions and depressions. That is why the crisis triggered by the pandemic, which led to a slowdown in economic growth around the world, increased the rate of gold. Which in turn led to a sharp shortage of yellow metal.
Thus, the volume of shares in gold exchange funds rose to a record maximum. Speculative long positions in the futures market are also increasing. Mints in the United States, Canada and Australia report record sales of gold investment coins and bullion.
A sharp collapse of US stock exchanges and a decrease in Treasury bond yields increase the likelihood of the Fed moving into a negative interest rate regime. In this scenario, we can expect a new jump in the gold exchange rate in the region of 1800 dollars per troy ounce already in early summer.
Leading investment banks in the world (for example, Goldman Sachs, Bank of America) forecast a rise in gold prices to $ 2,000-3,000 in the next two years due to the economic and geopolitical consequences of the pandemic. Thus, it is likely that in the long run, gold will set a new record, exceeding the 2011 figure ($ 1921 per ounce). Therefore, investors should allocate at least 10% of the investment portfolio for gold in order to reduce risks and balance total returns.