Experts disagree: Gold price breaks record - what happens next?

Experts disagree: Gold price breaks record - what happens next?

The price of gold has risen 17 percent since the beginning of March and now reaches around $2,400 per troy ounce, which is a record level. This strong upward trend in the precious metal leaves experts puzzled. Typically, negative interest rates, a weak dollar, a financial crisis or geopolitical uncertainties are seen as the main drivers of gold prices. Some of these factors are currently present, such as the conflict in the Middle East and Ukraine and problems in the Chinese real estate market. Nevertheless, there is currently no real financial crisis that would usually benefit the price of gold.

Experts attribute the current price increase to two main reasons. On the one hand, central banks are increasingly buying gold, with a total of 36,000 tons in the World Gold Council - a record value. China in particular is currently expanding its stocks. On the other hand, financial market players are speculating that the US Federal Reserve and the European Central Bank will significantly reduce interest rates in the near future. This would make gold more attractive compared to stocks or bonds. Therefore, speculative bets on the price of gold through derivatives and futures contracts increase, further driving up the price.

Various banks and analysts have increased their price forecasts for gold. The US investment bank Goldman Sachs sees the precious metal at $2,700 per troy ounce at the end of the year, while Bank of America even thinks $3,000 is possible next year. Despite some negative factors, US analyst David Rosenberg expects the price to rise above $3,000, citing falling interest rates and existing conflicts.

In addition to the positive assessments, there are also skeptical experts, such as the German Commerzbank. This described the sharp price increase in March as “mysterious gold strength”. They doubt that the price increase is justified based on central bank purchases and interest rate forecasts. For them, the potential gains from interest rate cuts have already been priced in and inflation in the US could make a rate cut more difficult. They predict that the price of gold will fall to $2,100 by the end of the year. Bullion Vault's Adrian Ash also warns of a possible downtrend, as no financial market only goes up in the long term.

Experts still recommend a certain degree of diversification into gold, especially in difficult financial market phases. An addition of five to a maximum of ten percent is generally considered sensible. There are ways to purchase gold in physical form, but also financial products that are backed by physical gold. After a holding period of one year, these are exempt from withholding tax, just like gold bars and coins.