The gold market breaks records

2024-03-06 23:54:01

Over one year, the price of gold jumped by around 15%, bringing it to a historic level. The yellow metal plays, as usual, its role as a safe haven in the face of a tense geopolitical context and a possible drop in rates in the United States.

It all started on December 13 with a “non-announcement”: that of the President of the American Federal Reserve Jérôme Powell, who decided to keep his key rates unchanged, which was a harbinger of a downward cycle in 2024.

Almost automatically, the gold market reacted, rising inexorably for weeks to a new all-time high on Tuesday, at $2,141 per ounce. And the upward trend is not about to stop; according to JP Morgan analysts, an ounce could reach $2,300 by the end of the year.

Anxious geopolitical context

However, gold is not benefiting from a completely favorable context. According to the manager France market activities at Saxo Bank, Andrea Tueni, interest rates remain high for the moment and the dollar is strong.

But the very anxiety-provoking geopolitical context plays on this safe haven which is uncorrelated with the real economy, for Jean-François Faure, president of Aucoffre.com. A trend which was confirmed during the Covid-19 crisis, then after the start of the war in Ukrainethe arrival of inflation two years ago and the conflict in the Middle East since last October have further added uncertainty to the markets and brought investors, banks and savers back to gold.

China, a growing market

The other factor is the Chine, which is historically very demanding of gold, and whose purchases of this precious metal have increased significantly in the run-up to the Chinese New Year in February. Last year, China’s central bank added 225 tonnes of gold to its reserves. India and Saudi Arabia are not left out. Most of the global demand for physical gold comes from emerging economies, which have fully integrated it into their need to diversify and find fallback alternatives.

Gold is even an asset that has been rediscovered on the markets “ like a quasi-currency », Estimates Jean-François Faure, and which is regaining the place it had lost among investors in the 2000s.