The price of gold continues to grow and analysts expect it to reach $2,100 an ounce. Here’s why the price goes up.
Banks, as well as individuals, use gold as a safe haven. In 2022, banks bought many tons of gold with the aim of increasing reserves of the precious material, an increase which according to the Word Gold Council is over 750 tons. An almost record level, at least in the last fifty years.
Meanwhile, the gold price continues to rise and has already surpassed the $1,900 per ounce mark. According to experts this is due to market turmoil and the risk of recession weighing on the West which has led central banks to increase purchasing. In 2023 the hypothesis is that the gold price will exceed 2,100 dollars an ounce. As banks continue to add gold to reserves, the prospect is one of a gold rush in the coming years.
But what are the reasons for buying so much gold? The answer is never unique and also in this case it is a question of a series of factors that contribute to this purchase increase and price. Here’s what experts say they are and why the price of gold will continue to rise.
Gold price rises: estimates at 2,100 dollars an ounce
We have already mentioned it several times: the trend of the gold price is very sensitive to macroeconomic dynamics. Gold is considered a "safe haven" not only by central banks, but also by individuals who accumulate it in order to have a sort of lifeline in the event of an economic crisis.
Today the value of gold continues to grow and does so influenced by the uncertainty weighing on the markets. Not only. In fact, the increase in the price of gold is also linked to the increase in purchases by central banks.
Among these, the central banks of Turkey and the United Arab Emirates have influenced the gold price significantly since the beginning of November. In fact, in 2022 they increased the gold purchased, with Turkey reaching 100 tons in 2022 and the Emirates with an increase of 9 tons only in October.
Against this trend, according to analysts, gold price could exceed the threshold of 2,100 dollars an ounce in 2023. The reason would be precisely the gold rush of the banks anti-inflation.
Purchase record since 1974: data from the World Gold Council
According to data from the World Gold Council in the first months of 2022 central banks bought 673 tons of gold, the first record since 1967 and in the last months of 2022 there was a further increase which brought the tons purchased totals at 750. A new record level since 1974.
In first place for the purchase of gold is the United States with over 8,000 tons of gold in safes, in second position is Germany and in third place is Italy with 2,452 tons, mostly lingots.
The policy of increasing the gold reserves of the banks aims to protect balance sheets in the event of political choices by governments that could destabilize them. Indeed, as Daniel Lacalle comments on The Epoch Times, it is precisely when banks risk losses that they buy a safe haven such as gold.
Original article published on Money.it Italy 2023-01-15 11:21:27. Original title: Oro, il prezzo continua a salire: ecco perché
