Gold bulls break $US2000/oz barrier

Gold price

The gold price has touched $US2000 ($2719) per ounce, marking a five-week high and following a strong start to 2022 which saw it rise 8 per cent.

The past 30 days have seen the gold price rise $38 (1.97 per cent) while the past six months have seen an 11.57 per cent increase in the wake of the Russian war on Ukraine.

The 8 per cent rise over the first quarter of 2022 was the best quarterly performance since Q2 2020, according to the World Gold Council.

“In a period marked by economic uncertainty and increased volatility, gold proved a reliable source of diversification and wealth preservation,” the WGC stated.

“The Gold Outlook 2022 outlined our expectation for the competing forces of higher, more persistent inflation and rising rates to be the biggest influences on gold’s performance.

“The Russia–Ukraine war added an additional layer to this, as investors sought high-quality safe havens like gold amid equity market volatility and compounding unanticipated inflation pressures, including record oil prices.”

The increased volatility caused by the war recently saw Fitch Solutions raise its gold price assumptions for 2022-2024, owing to the commodity’s “safe haven investment status”.

The market analyst raised the 2022 gold price assumption from $1600 to $1800 per ounce. 2023 moved from $1400 to $1600, and 2024 moved from $1300 to $1400.

From 2025, it becomes harder to predict.

“Long-term price moderation is unchanged as the interest-rate hiking cycle continues, ultimately increasing the opportunity cost of holding gold and putting pressure on its price,” Fitch stated.

The gold price last surpassed $2000 per ounce on March 8, as it returned from 18-month highs above $2050.

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