(CercleFinance.com) – Gold has continued to hit record highs in recent weeks and its surge is not about to stop any time soon, analysts and market strategists believe.
The precious metal reached a new absolute record last night at $2,372.5 per ounce, with investors seeing it as a safe haven in the face of uncertainties regarding the evolution of rates in the United States and Europe.
After climbing almost 2% last Friday, which brought its gains over the past week to around 4.5%, it is up another 0.3% to $2,354.3 at present.
These good performances contrast with those of the stock markets, which seem to be struggling since the end of March. Last week, the CAC 40 index fell by 0.9% and the S&P 500 by around 1%.
At the same time, the CBOE VIX index that measures volatility on the S&P – often referred to as the Market Fear Index – surged to five-month highs.
According to professionals, investment demand from funds and institutional investors, but especially purchases by central banks, should continue to support prices.
“Central bank purchases constitute a bullish groundswell,” underlines Christopher Dembik, investment strategy advisor at Pictet AM.
‘In February, they bought 19 tonnes of gold, a total of 64 tonnes since the start of the year. This is the ninth consecutive month of net purchases,’ underlines the strategist.
If central bank purchases seem largely to be at the origin of the upward movement, some analysts also see it as a sign of distrust of public debt, particularly in view of the presidential election in the United States.
‘Gold has been pushed higher by hedge funds or speculators taking advantage of the strong momentum ignited by investor demand around the world in response to heightened geopolitical tensions and concerns over financial stability in a highly indebted world ‘, underlines Ole S. Hansen, the raw materials specialist at Saxo Bank.
This analyst had expressed his optimism on gold from the start of the year, estimating that 2024 would be ‘the year of metals’ such as silver, copper or platinum.
While he recognizes that gold could consolidate a little in the short term, Hansen sees gold continuing its rise towards the $2,500 threshold due to the rate cuts looming on the horizon, which he believes will weigh both on the dollar and bond yields.
From his point of view, the biggest threats come from the lowering – a scenario however deemed ‘unlikely’ – of the global geopolitical temperature or the suspension by central banks of their aggressive purchases of gold.
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