Gold prices tend to increase during times of massive money printing. This is because gold is seen as a hedge against inflation, and inflation is often a consequence of massive money printing.
When central banks print money, they increase the supply of money in circulation. This can lead to inflation, which is a decrease in the purchasing power of money. Gold is often seen as a way to protect against inflation, because its value tends to go up when the value of money goes down.
In addition, gold is often seen as a safe haven asset during times of economic uncertainty. When investors are uncertain about the future of the economy, they often turn to gold as a way to protect their wealth.
In recent years, there has been a lot of money printing by central banks around the world. This has led to a rise in the price of gold. In 2020, the gold price reached an all-time high of over $2,000 per ounce.
Gold is often seen as a safe haven asset, and its price can go up during times of economic uncertainty. In recent months, there has been a lot of uncertainty in the global economy, and this has led to a rise in the price of gold.
There are a number of factors that could support the gold price in the coming months. These include:
- Inflation: Inflation is on the rise in many countries around the world. Gold is often seen as a hedge against inflation, as its price tends to go up when the value of fiat currencies goes down.
- Economic uncertainty: There is a lot of uncertainty in the global economy at the moment. This is due to a number of factors, including the war in Ukraine, the ongoing COVID-19 pandemic, and rising inflation. Investors often turn to gold during times of economic uncertainty, as it is seen as a safe haven asset.
- Lower interest rates: Interest rates are very low in many countries around the world. This makes gold more attractive to investors, as it offers an alternative to low-yielding assets such as bonds.
Of course, there are also some factors that could weigh on the gold price in the coming months. These include:
- A temporary stronger US dollar: The US dollar has been strengthening against other currencies in recent months. This could make gold less attractive to investors, as it is priced in US dollars.
- A rise in real interest rates: If real interest rates rise, this could make gold less attractive to investors, as it does not offer any income.
Overall, there are a number of factors that could support the gold price in the coming months.
Shayne Heffernan
