2023-06-04 06:11:21
Will gold prices return to $2,000 an ounce? Is the current time appropriate to buy with these large declines in gold prices, or wait for a longer time, waiting for gold prices to decline once more? The question raised here, which many investors and experts are discussing, will be answered following we get to know the price of the dollar, so do not be surprised by that, as gold prices are linked to an inverse relationship with the dollar price index.
Therefore, US Treasury yields and the dollar continue their upward trend, in addition to the US debt ceiling crisis, and an attempt to curb the rise of gold prices, which are moving to a range of approximately $1950 an ounce, following reaching the $2000 level during the middle of last month.
Also read: Major changes in gold prices… and an important message from the Gold Division to citizens.
At the end of last week’s transactions, gold futures rose slightly by 60 cents, reaching the level of $1944.30 an ounce, while recording weekly losses of 1.9% for the third time in a row, and economists confirmed that the summer will be hot for gold prices, as gold will remain trading in an Occasional for a longer time, but expectations indicate that gold prices will reach the $2000 level once once more.
However, it must be known that gold prices at the present time are still high by approximately 7% since the beginning of the current year 2023, and regarding 5% in a full year, despite a loss of more than 2.2% in a whole month, and that the average annual performance of gold prices reached the level of 9.2%. As a return on gold prices in US dollars from 2006 until the previous year, and these returns are considered excellent by all investment standards, according to what was announced by Mazen Salhab, chief economic markets strategist at BDSwiss MENA.
Also read: A big surprise in gold prices following the US Federal Reserve’s statements.
The reasons for the decline in global gold prices during the last period
Mazen Salhab answered this question first and foremost in the United States of America, where the personal consumption expenditures index in America increased by 4.7% annually, and this means that economic inflation in America continues, and therefore interest will not decline quickly, but on the contrary, it may rise during a meeting Next month for the Federal Reserve, but more importantly than all of this, the rise in short-term returns 3, 6/12 months on US Treasury bonds, which reached their highest level of 5.2%, and thus the US inflation rates rose to regarding 4.9% and that the returns became positive and this is The killing of gold as stated by the expert.
He pointed out that the last point is that raising interest rates will make lending costs high, and liquidity declines, which prompts major investors and even central banks to partially sell gold to obtain the necessary liquidity, especially following the strong purchase during the first quarter of the current year 2023, and we should not be surprised by this. Gold liquefaction is possible and fast in the markets without the need to resort to traditional markets.
Also read: Bloomberg Agency announces important news regarding Egypt.
Will gold lose its gains in 2023?
The economist confirmed that this summer will be hot for gold prices, as its trading will remain occasional in many times, but reaching once more the level of $ 2000 for the price of gold per ounce will not be difficult, and even if the price of gold declines, the markets expect a reduction in interest rates at a later time. of the year.
According to Salhab’s statements, he confirmed that the price of gold will not decline strongly and lose all its gains during the current year 2023, except in one case only, which is the decline in economic inflation rates faster with the rise in interest rates, and this will not happen because economic inflation does not decline quickly.
He believes that the completion of the interest-raising cycle is nearing the end according to economic and historical criteria, and therefore caution during the current time is an exaggeration in estimating the speed of the US economy’s decline, which may not happen as quickly as some bet.
Also read: International Monetary Fund expectations for the dollar price during the coming period.
So what is the right time to buy gold?
Salhab answered that the decision to buy gold depends mainly on each person, his investment goal, and the return to be obtained from buying gold. Until now, gold still has a good value in economies whose local currency is declining and rapidly losing value, such as Egypt, Syria, Turkey, Iraq, and Lebanon. and other countries.
He pointed out that the United Arab Emirates enjoys a strong and stable currency, in addition to the presence of excellent purchasing power, so it is possible to resort to diversification in investment between gold, investment funds in gold, and shares of companies working in the field of gold mining, and this usually gives distributions, and the investment is long-term and medium.
Also read: The time is right to buy gold.. Important advice from the Gold Division.
Also, Tariq Al-Rifai, CEO of the “Corum Center for Strategic Studies” in London, announced that the decision to buy gold can be made at any time to invest in gold, and the investment must be long-term, as gold is considered a safe economic haven, but when following gold prices during a year, the price of gold is usually What is declining during the summer period, following the price of gold rose to the level of 2060 dollars per ounce, it quickly declined to the level of 1946 dollars, due to the pressure of the US debt ceiling crisis, but he expected, despite this, that gold prices would witness a record high by the end of the current year 2023.
Read also: The price of gold today in Egypt.
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