There has been a rise in the price of gold over the past three months. In fact, it did reach its yearly low in early November 2022 at $1,640 per ounce, a price it had previously reached in September. However, the recovery from October had taken it back to approximately $1,720, the recovery from November 4th put it up to over $2,000 in early February, and as of today, February 12th, it is hovering around $1,865.
Gold is Believed to Rise Above $3,000 in the Foreseeable Future
On the 2nd of February, the price of gold briefly reached a height of $1,960 before beginning a decline that drove it back below $1,900, and now it revolves somewhere between $1,860 and $1,880 on February 12th.
However, some people specifically think that gold might rise in price to around $3,000. Leigh Goehring, the managing partner of Goehring & Rozencwajg, recently told Kitco News that he wouldn’t be shocked to see a price of $3,000 this year because there doesn’t seem to be any opposition to the potential increase in the price of gold. Goehring also states that these declines were merely a few, extremely brief isolated incidents.
Fed Policies About Inflation Might have an Enormous Effect on Gold’s Value
Leigh Goehring adds that the market is incorrectly pricing inflation as the Fed ends its aggressive phase of tightening monetary policy. When the Fed stops hiking interest rates, there will be other significant issues with inflation, which will cause a rise in the price of gold.
These are just conjectures, given the current trend shows a considerable and steady decline in inflation, but they are based on the idea that the Fed won’t be able to maintain its tight monetary policy for very long. It will unavoidably need to soften it a little at some time, and at that moment, there will be a risk of a pickup in inflation.
According to financial markets, the dollar’s worth, or the Dollar Index (DXY), and gold‘s value appear to be negatively connected. The dynamics over the price of gold mimic the Fed‘s monetary policies rather than those of inflation. Ironically, gold’s value did not change much when inflation increased, but it did begin to decline when inflation did. Therefore, the rise in the price of gold responds to changes in the Fed’s monetary policy rather than being connected with inflation.
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