Gold price increases are on standby. This may mean calm before the next storm. This opinion was expressed by a leading analyst in the world's largest hedge fund Bridgewater Associates.
What will happen next with the price of gold? Is a short consolidation phase taking place now, or should we say goodbye to new highs for a while? Yesterday, the signing of an interim agreement between the US and China, which brought the end of the many-month-long trade conflict, could not completely remove the uncertainty in the financial markets.
Some analysts fear that US President Donald Trump may now tackle the European Union to subordinate him to his desires. In addition, US penalties remain on China’s goods: about 25% on manufactured goods worth $ 250 billion. No one expects barrage duties to be completely canceled in the near future.
What about inflation?
On the spot market today, one troy ounce of gold was worth $ 1,552, corresponding to € 1,391. Some investment companies view the current lull as a chance to increase their investment in yellow precious metals. The largest hedge fund Bridgewater Associates believes that sooner or later, prices for precious metals will rise again. Deputy Director of Investments Greg Jensen told the Financial Times that the US Federal Reserve will seek to increase inflation in the country. None of the major Central Banks will attempt to normalize interest rates. In addition, stock markets around the world are at record levels.
$ 2,000 gold?
Ultimately, inflation in the United States can begin to really grow amid increasing deficits in the state budget and the country's trade balance. “This can happen very quickly or in ten years. But in any case, it is only a matter of time. If you look at the geopolitical struggle, how many companies want to accumulate dollars? Gold in this case becomes a favorite, ”says an analyst at Saxo Bank.
Bridgewater predicts that gold will be able to gain a foothold above the support level of $ 1,540 per ounce. But in case of escalation of political conflicts, the cost of yellow precious metals may exceed $ 2000 per ounce. In this case, the historical record of 2011 at the level of $ 1921 will be overcome.