Gold, a safe haven that is losing its luster

Traditionally considered by many individuals as the safe haven par excellence to maintain its purchasing power, gold has benefited from the strong recovery in inflation observed on a global scale by the International Monetary Fund (IMF) since the beginning of the year 2021.

However, after reaching a new historic high, crossing the symbolic threshold of 2,500 dollars per ounce (31.104 grams) in March, the price of the yellow metal is struggling to register again in an upward trend. Denominated in euros, the price of gold has even lost more than 10% since January, and 20% since its peak in early March.

To explain this poor performance of gold, Alexandre Baradez, head of market analysis at IG, points in particular “the recent increases in key rates decided by the main central banks and in particular those of the Fed, the American Federal Reserve, intended to curb the rise in inflation in the United States”. Indeed, according to him, “higher interest rates de facto increase the opportunity cost of holding gold, a dollar-denominated asset that offers no return unlike other financial investments, such as bonds for example”he adds.

Several ways to invest

Nevertheless, some professionals, like Alain Corbani, manager of the Global Gold and Precious fund at Finance SA, believe that “The peak of inflation has now been reached in the United States, which should limit the upward movement of the Fed’s key rates in the coming months and would thus favor a rebound in gold prices”.

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For savers looking to benefit from a rally in gold prices, there are several ways to invest.

The first is to buy physical gold (coins and ingots) from your bank branch or from a specialized pharmacy. It is also possible to turn to specialized online platforms.

But, be careful, in all cases, you have to pay a commission on all transactions, generally between 2% and 5% of the amount of the transaction, on purchase but also on resale. Added to this are storage costs when renting a safe to avoid any risk of theft, because specialists advise against keeping your treasure at home.

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To avoid this pitfall, it is possible to position yourself on paper gold, by investing in a Sicav or an equity FCP specialized in this theme. About ten funds implementing this type of investment strategy are currently available on the French market.

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