Gold prices may increase by another 10 percent by the end of the year. Konstantin Tserazov, economist and former senior vice president of Otkritie Bank, told socialbites.ca about this issue and commented that the cost of gold had risen to $ 2,100 per ounce.
“Gold is the traditional and most popular tool to hedge against inflation. And from that perspective, it has room to grow. This year gold has a chance to rise to at least $2,300 per ounce,” Tserazov said.
Inflation, like many other macroeconomic phenomena, is cyclical in nature, and today we are simply experiencing a change in the inflation regime: After a multi-year period of low global inflation, we are entering a multi-year period of high global inflation. which gold will prevail.
In 1980, gold reached a historical high of $850 per ounce. That’s about $3,200 per ounce in today’s dollars (that is, adjusted for inflation, which has since risen to 274% in the US). The expert gives an example that is noticeably higher than current levels.
However, gold has an important feature: It does not create cash flow, Tserazov warns. For example, the owner of a bond receives a coupon payment and the owner of a stock receives a dividend payment. In the case of gold, the owner receives nothing unless he lends the precious metal to someone at interest.
Therefore, according to the expert, gold does not always show strong dynamics in conditions of high inflation. Often such periods are accompanied by high interest rates.
On Monday, December 4, the price of gold rose for the first time in history overcome $2,100 per ounce, according to trading data. December gold futures on the Comex exchange rose $17.7, or 0.85%, to $2,107.15 an ounce. Meanwhile, silver also showed growth, with its price increasing by 0.09% to $25,317 per ounce.
Russians before asked 1.6 kg of gold per year for confidence in the future and a comfortable life