Gold should continue to be sought as a safe haven if there is significant uncertainty about future interest rate levels. In the same way, gold and interest rates also contribute to moving the price of gold, since lower interest rates, which usually occur when there are times of financial uncertainty and governments want people to spend, mean that saving is more difficult. Given the cyclical nature of the markets, the upward movement in gold prices is likely to remain intact for several more years. In the short term, the negative impact of these trade tensions has only caused a modest response from the price of gold.
Gold is one of the most consolidated and mature markets in existence when it comes to investable assets. However, due to its negative correlation, when the dollar loses value, for example due to inflation, the price of gold often rises. Gold is not an asset that is prone to large price fluctuations or high volatility, but it is known to grow almost constantly as its uses and market desire continue to increase. Since gold is also considered a very effective portfolio diversifier due to its low and negative correlation with major asset classes, it tends to rebound in times of uncertainty, so one of the factors to consider is the relationship between gold and other asset classes that feel pressure or pleasure in current financial circumstances.
The outlook for the price of gold will probably depend on how geopolitical tensions develop and how monetary tightening affects the world economy, among other factors. I use a combination of technical analysis and observation of market fundamentals to make my predictions about the price of gold. Some investors may choose to maintain some exposure to gold in their portfolio to diversify, as a protection against the fall in stocks and bonds. Let's return to the idea of cyclicality in the gold market and to future patterns that rhyme with past history.
The future price of gold (GC) will be 2260,638 USD. Of course, gold is also used as a hedge in times of geopolitical uncertainty, since the asset provides more stable value when crises, such as war, are looming. In fact, according to some industry experts, under normal circumstances, there is a negative relationship between gold and interest rates. Gold and inflation also work together, since inflation is one way in which money can devalue quickly, and when this happens, people prefer to keep their money in something that increases in value rather than in something that increases in value, such as gold.