The main arguments cited for a rise in the price of gold are the increase in central bank purchases of gold and the decrease in real interest rates. After the multi-year correction in the price of gold, investors could once again see gold as a safe haven if needs arise. According to the analyst, central bank monetary policy, inflation, risk differentials, current economic developments and reactions to political risks are generally essential for the evolution of the price of gold, since gold has the status of a safe haven in crises. Since gold is also considered a very effective portfolio diversifier due to its low and negative correlation with major asset classes, it tends to rebound in times of uncertainty, so one of the factors to consider is the relationship between gold and other asset classes that feel pressure or pleasure in current financial circumstances.
Gold and inflation also work together, since inflation is one way in which money can devalue quickly, and when this happens, people prefer to keep their money in something that increases in value rather than in something that increases in value, such as gold. Investing in gold has never had a better time to start than right now, the price is about to skyrocket, but participating in the trading of such a product can be difficult due to its physical nature and the exclusivity of many gold brokers, who are not as open to new traders. In an interview with Focus magazine, Eugen Weinberg, a gold price expert at Commerzbank, expects a gold price of 1,300 USD by the end of the year. The policy of quantitative easing is in full swing in some of the largest economies in the world and this is good news for gold, since savings are ignored when it comes to the dollar and a new means of saving, such as gold, is needed.
The World Bank maintains that the price of gold would fall, for example, due to the fact that institutional investors would consider gold a less “safe” investment than before. According to a bank report, Goldman Sachs estimates that the gold price cycle is likely to have already started to change and hopes to put an end to the twelve-year rise in the price of gold. In addition, the fact that gold is a scarce asset, but with an uncertain supply, means that it is often worth watching the markets and forecasting gold prices for the next 10 years can often bring positive gains over this long period of time. Deutsche Bank expects that the expansion of central banks' balance sheets and the resulting increase in investor demand for gold will result in an increase in the price of gold.
Analysts said that the weak trend in the price of gold was not linked to the drastic increase in the price of bitcoin, as evidenced by the absence of the broad output that was otherwise expected from gold ETFs. Analysts also mention that a stronger outlook for the price of gold may not be that far off, as an improvement in demand for gold from India, China's return to the market and a correction in the stock market could cause an upturn. While the strength of the US dollar and weak demand for jewelry from countries such as India and China will put pressure on the price of gold, investor demand is expected to eventually cause the price of gold to rise. In the long term, analysts expect demand for gold to increase due to strong growth in emerging markets and that the “wealth” channel will end up dominating demand for gold.