Global industrial demand for silver in 2023 is expected to set a record leading to another big market deficit. Consumer debt topped $5 trillion for the first time ever in November as Americans continue to kick the financial can down the road as they cope with rising prices using credit cards with soaring inter… There were more corporate bankruptcies in 2023 than there were during the pandemic of 2020. Higher interest rates and massive levels of corporate debt drove the flurry of business failures….

  1. As we enter 2022, the US Federal Reserve is signalling a more hawkish stance.
  2. As such, investors often look to gold as a way to protect the value of their portfolios during inflationary periods.
  3. A change in the fundamental factors underlying the Morningstar Medalist Rating can mean that the rating is subsequently no longer accurate.
  4. This shows that people have always been fascinated by gold and by its rarity, durability and beauty.
  5. Another likely reason is Newmont’s currently elevated unit cash costs.
  6. It is important for investors to remember that none of these stocks have a competitive advantage or an economic moat.

Finally, US equities had their strongest performance ahead of a tightening cycle but delivered softer returns thereafter. As the analysts said, with plentiful supply in most markets and a price that’s fallen, the general gold market will likely remain unfazed. Western governments sanctioned Russia’s main gold-trading banks, including VTB, Otkritie, and Sberbank, and many international banks, refiners and shippers stopped dealing with Russian bullion. Price growth is gradually declining, but recent data suggests that the economy is strong, particularly due to robust household spending.

It is possible to invest in the precious metal on the stock exchange or through brokers in the form of gold certificates, gold funds or gold ETFs, without receiving any physical gold. Another form of investing in gold is Xetra-Gold, a no-par loan, which is denominated in gold holdings. This can be purchased on the stock exchange and transferred in the same way as a share. The idea that gold preserves wealth is even more important in an economic environment where investors are faced with a declining U.S. dollar and rising inflation.

A lack of progress in the Fed’s efforts to lower inflation, on the other hand, could cause XAU/USD to turn south. The price of gold settled just below $2,100 on Friday for a record high after rising 4% last week. It briefly broke above that level when trading began again Sunday evening, before both spot and futures prices dipped about 2% on Monday.

Latest XAU/USD Analysis

This adds to inflation pressures and makes it more likely that the Fed will maintain a restrictive monetary policy stance for a longer period. Gold kicks off the new week on a weaker note and stalls a two-day-old recovery trend from the vicinity of the $2,000 psychological mark. Reduced bets for an early interest rate cut by the Fed, along with a generally positive risk tone, prompt fresh selling around the XAU/USD price. “We believe the main factors buoying gold in 2024 will be interest rate cuts by the U.S. Fed, a weaker U.S. dollar and high levels of geopolitical tension,” BMI, a Fitch Solutions research unit, said in a recent note.

Gold as a Hedge Against the Dollar

Bar and coin investment maintained its momentum, jumping 31% to an eight-year high of 1,180t. Q demand of 318t, meanwhile, was the highest for a fourth quarter since 2016. This information is not a recommendation or an offer for the purchase or sale of gold or any products, services, or securities.

Gold returns following extreme net shorts are overwhelmingly positive

Any references to LBMA Gold Price are used with the permission of ICE Benchmark Administration Limited and have been provided for informational purposes only. ICE Benchmark Administration Limited accepts no liability or responsibility for the accuracy of the prices or the underlying product to which the prices may be referenced. All third-party content is the intellectual property of the respective third party and all rights are reserved to such party. All references to LBMA Gold Price are used with the permission of ICE Benchmark Administration Limited and have been provided for informational purposes only. Other content is the intellectual property of the respective third party and all rights are reserved to them. Pullbacks are likely to continue in the face of the seemingly endless stream of new variants, as well as simmering geopolitical tensions and overall buoyant equity valuations fuelled by a long-lasting ultra-low-rate environment.

High-quality issue briefs, gold and Silver price charts, and breaking news alerts. The acquisition of Newcrest extends Newmont’s lead over Barrick Gold as the world’s largest gold miner by sales. We forecast Newmont to increase attributable gold sales to around 8.8 million ounces in 2027, up from roughly 7.3 million in 2023 pro forma for Newcrest on an annualized basis. The increase is driven by higher gold production from its 38.5% and 40% stakes in the Nevada Gold Mines and Pueblo Viejo joint ventures with Barrick, respectively, Lihir, Penasquito and its mines in Ghana. About 70% of Newmont’s midcycle production in 2027 comes from the U.S., Canada, Australia, and Ghana. In aggregate, the company sits around the middle of the cost curve but we expect some improvement.

“My technical target for gold is $2500/oz, and it looks appealing to be long precious metals given falling real rates, rising cycles and ongoing geopolitical conflict,” he wrote in his note. “Finally, the third factor that drives the movement in the price of gold is uncertainty in the market,” says Azoury. “Gold prices seem to protect against bad economic times, which some refer to as the pessimism about the future conditions factor. People seem to flock toward gold xm broker review when the economy is in bad shape.” “The second factor impacting the price of gold is expected long-term real interest rates,” says Azoury. “A rise in interest rates usually drives down the price of gold. A decrease in the interest rate will do the opposite, increasing the price of gold.” We modestly raise our fair value estimate for Kinross Gold to USD 5.35 per share, up from USD 5.20, driven by Kinross extending production at its Round Mountain mine in Nevada.

Kinross Gold (K)

While diverging monetary policies could result in a stronger dollar, steady or decreasing rates should support regional gold investment demand. China and Australia are the other countries topping the list of gold miners. The Fed is expected to keep interest rates unchanged in the range of 5.25%-5.50% for the fourth consecutive time at the monetary policy meeting on January 31. Market participants will focus on the commentary about how the Fed will fit the expected three interest rate cuts in the remaining seven policy meetings of 2024. brings you all the latest live gold news, headlines, data analysis and information from the global gold markets. Keep up to date with the largest and fastest source of gold market news information.

Newmont shares remain materially undervalued in our view, trading at a 31% discount to fair value. We think this is partly due to concerns over rising real interest rates, which increase the opportunity cost to hold gold. Another likely reason is Newmont’s currently elevated unit cash costs.

Moreover, Pakistan carried out military strikes in Iran on Thursday following a similar attack by Iran in its territory. Get this delivered to your inbox, and more info about our products and services. The Fed started its steady stream of rate hikes in March 2022 as inflation climbed to its highest in 40 years, diminishing gold’s appeal. “This is quite positive technically, and I expect that gold has begun its push back to new all-time highs,” Newton wrote, adding that a move above $2,009.41 should lead to the $2,060-$2,080 range.

About Gold

Gold may also be a safe-haven asset when the economy turns sour and the prices of stocks and bonds suffer. In the end, whether to invest in gold will depend on your individual circumstances and market outlook. As such, when long-term interest rates are high, treasuries are more attractive, which can lead to declines in the demand for, and therefore the price of, gold. This material on this website is intended for illustrative purposes and general information only.

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