The price of gold, considered one of the safe-haven assets in times of uncertainty, has once again reached historic highs by surpassing $2,740 per ounce during Monday's trading session. Despite reaching this new record, by the close of markets in Europe, the value of the precious metal stabilized around $2,724, with a slight increase of 0.08%.
So far this year, the price of gold has experienced a revaluation of 32%, with a bullish streak of five consecutive sessions. Charlotte Peuron, the manager of the precious metals fund at Crédit Mutuel AM, highlights that the demand for gold has been supported not only by the jewelry industry, accounting for approximately 40%, but also by central banks of emerging countries looking to diversify their foreign currency reserves.
Additionally, Peuron mentions that small investors are choosing to protect their savings by investing in gold bars and coins. Factors such as low real interest rates in the United States, more accommodative monetary policies, global economic uncertainty, and geopolitical tensions have contributed to the increase in demand for gold ETFs, thus supporting the metal's prices.
On the other hand, Banca March attributes the increase in the price of gold to the European Central Bank's (ECB) decisions to lower interest rates and expectations of further cuts at the end of the year. Experts at Macquarie point out that the gold rally has been steady and, although not explosive, its rise has been faster than expected, also attributed to the complex budgetary outlooks in developed markets and events like the elections in the U.S.
In this regard, uncertainty regarding the scope and effectiveness of the stimulus measures applied by Chinese authorities is emphasized. ETF investors, mainly from North America and Europe, are seeking to protect and diversify their portfolios against market volatility and global uncertainty.
