Gold continues to defy the bearish threats of high interest rates and a strong US dollar and remains close to $1,930 an ounce.
The strength of gold despite the macroeconomic environment presenting a challenging time for the precious metal illustrates the level of central bank support for the haven asset, particularly from those countries, such as China, looking to diversify away from the hegemony of the US dollar.
One factor helping gold continue to trade comfortably above $1,900 an ounce is the prospect of central bank interest rates nearing their peak, particularly in the light of last week’s surprising pause by the Bank of England. That said, while interest rates are unlikely to climb much higher, they are set to hold at current levels for the foreseeable future, reducing the appeal of physical gold due to its lack of yield.
However, this apparently reduced appeal at a time of rising and high interest rates hasn’t come to pass for the bulk of 2023, with gold having spent the majority of the year above $1,900, a threshold it has only surpassed a handful of times in its long trading history. Having shown so much resilience so far, any drops are likely to be slow and steady rather than a collapse in the gold price while further gains are hard to see given the weight of the bearish factors continuing to weigh on the precious metal.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
Read our Editorial Guidelines here.
