After pausing for breath late last month, gold has taken off again over the past few days, approaching $990 an ounce early this week before dropping back to around $960 as traders took profits; it then headed up to a new record over $990. And the long-term bull run looks far from over.
Last week's tumble in the greenback was prompted by Fed chairman Ben Bernanke's evident intention to cut rates further despite high inflation. His desperate dash for growth at the expense of higher prices means "investors are being handed engraved invitations to protect their wealth by getting into the prime inflation hedges: precious metals", says Chris Weber on Kitco.com.
Higher oil prices are also fuelling inflation fears, while ongoing credit jitters and the prospect of a nasty recession in the US are bolstering gold's appeal as the ultimate safe haven and store of value. Higher inflation expectations amid commodities' strong recent run and continued dollar weakness should continue to underpin investment demand for gold, said Standard Bank.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
With investment demand showing no sign of abating, the possible sale of 400 tonnes of IMF gold should be easily absorbed over time, as Fxstreet.com points out. Speculators have continued to buy gold despite rising prices, said Martin Hutchinson on Breakingviews.com, and as long as real global interest rates are low, this is likely to continue. Given that there is far more money available to invest now than in 1980, gold may well exceed the 1980 peak of $2,250 in today's dollars.
-
8 of the best houses for sale with annexesThe best houses with annexes – from a period property in the Lake District to a 13th-century house with a two-bedroom annexe in Saltwood, Kent
-
Zelenskyy moves to appease Donald Trump – what happens now?Ukraine’s president Volodymyr Zelenskyy is conceding ground to secure the least-worst deal possible, says Emily Hohler
-
Gold regains some of its shineNews The gold price perked up this week, hitting a four-week high.
-
Gold regains its shine after inflation risks resurfaceAnalysis Gold prices have been rising over the past month as fears of US inflation resurface. Saloni Sardana explains whether this could usher in a new bullish era for the precious metal.
-
The going looks good for goldAdvice With inflation fears rising and interest rates nailed to the floor, the outlook for gold is bright, says John Stepek.
-
Mark Mobius: “I love gold”Features Mark Mobius, perhaps the best-known emerging markets investor in the world, reckons that gold should form at least 10% of any investor’s portfolio. And now is a good time to buy.
-
Gold is poised for a new bull marketFeatures The price of golf has hit a six-year high, breaching the $1,400 an ounce level not seen since August 2013.
-
Why you need to own goldTutorials All the talk of Modern Monetary Theory misses one key point, says Eoin Treacy. We’re already well down the road of printing money to fund government spending.
-
Fed interest-rate rises won’t hold the gold price backFeatures Some analysts worry that higher US interest rates are bearish for gold. But the evidence doesn’t bear this out.
-
The weak US dollar trade is still on – stick with goldFeatures With little chance of higher US interest rates in the near future, the weak dollar trade is still on. John Stepek explains why, and the best way to profit.
