Why does the price of gold continue to rise?

This was already the case in the heart of summer and the movement is confirmed in this very agitated September return on the international scene. The precious metal remains a safe haven.

An ounce of gold is currently worth, at the beginning of September 2024, $2,500, the equivalent of €2,256. It should be noted that an ounce of gold represents 31 grams, which puts a one-kilogram ingot at nearly €73,000. A situation that has lasted for two weeks, something never seen since 1967.

The latest development is the prospect of lower interest rates in the United States. At the recent major annual meeting of central bankers in Jackson Hole in the United States, Fed Chairman Jerome Powell stressed that the time had come to adjust monetary policy. In other words, to start lowering the rates that have been kept high until now to prevent inflation from spiraling out of control, which is generally positive for the price of the yellow metal. Gold has the particularity of not making money… but not losing money either. As a drop in interest rates weakens the yield of other riskier investments, there is a shift of investors to bullion.

Precious metal remains a safe haven, because it is not expensive debt. If gold does not yield anything, it reassures, especially in times of strong economic or geopolitical tensions such as those we are experiencing today. Finally, demand is particularly strong from central banks, particularly in emerging countries.

The central banks of China, Russia, India, Africa, Turkey, Kazakhstan, etc. want to secure the huge profits from their exports, particularly of oil, raw materials and electronic components. This also allows them to free themselves from their dependence on the dollar, and therefore to free themselves from the United States. Over the last two years, the central banks of these countries have acquired around a thousand tons of gold per year. This has not been seen for about fifty years.