Factors causing gold to become cheaper
The new record growth in the price of gold again attracted the attention of many investors and increased the popularity of this asset.
At its peak, the cost of one troy ounce exceeded 2,150 US dollars, which became its new maximum in the entire history of trading.
But the price increase did not last as long as investors wanted, and after reaching the peak, the price of the precious metal began to gradually decline.
And soon she surpassed the psychological mark of $2,000. At the moment, the price of gold is at $1,988 per troy ounce.
I have already noted more than once that today it is more profitable not to use the “ Buy and Hold ” strategy, but to make money on price fluctuations. Buying at the lows and selling as soon as factors appear that could cause the price of gold to decline.
These factors include:
Rising interest rates in the US. Rising interest rates make gold less attractive to investors looking for higher-yielding assets.
Reduced inflation. Lower inflation reduces the demand for gold as a hedge against inflation.
Improvement of the global economic situation. An improving economic situation reduces the demand for gold as an asset that can be used to hedge risks.
A pullback after strong growth - this pattern is repeated so often that it can also be classified as a technical analysis factor. If gold goes up more than a couple of percent in a short period of time, be prepared for the price to go down.
Here are a few more factors that could cause the price of gold to decline in the near future:
- The outcome of negotiations between Russia and Ukraine. If the negotiations are successful and a peace agreement can be reached, this could lead to a decrease in demand for gold as a protective asset.
- US election results. If the Democratic candidate wins the election, this could lead to higher interest rates in the US, which in turn could reduce the demand for gold.
- Inflation dynamics in the USA. If US inflation slows, this could reduce demand for gold as a hedge against inflation.
As soon as you see the news mentioned above, you should think about selling your existing gold or opening an unsecured sale transaction.
And in the current situation, all that remains is to wait for the price to fall even lower and then open a new buy deal.
This time I was not able to catch the very peak of the price; the gold purchase transaction was closed at $2080 and brought about 8% profit, which is not bad, considering that this is not my first gold transaction this year.
You might be interested:
Brokers through which I trade gold - https://time-forex.com/vsebrokery/brokery-zoloto-serebro
Trading gold in the trading platform - https://time-forex.com/interes/torg-zoloto-terminal