Written by Nikita Buzhor, content specialist, on behalf of Exness.
The value of gold to human beings is no longer to be presented. It quickly imposed itself on the daily life of primitive society. Although it is not abundant on the surface of the terrestrial globe, the yellow mineral symbolises power, strength, and wealth.
It has been appreciated by different civilisations and it is used especially for the manufacture of coins, jewellery, and arts because it is easy to transport fragments and be transformed on one side.
Maybe, that’s why the Exness gold trading is one of the most popular trends now!
Since April 2001, the price of gold has quintupled in value and reached $1 913.50 in August 2011 or €1 713.47. The movement of gold prices has been volatile with a succession of rises and falls in the price of gold.
This rise in the price of gold can be reflected in the currencies of the main gold-producing countries, in particular the currencies of Australia, Canada, and South Africa. So the currencies Australian dollar (AUD), Canadian dollar (CAD), or South African Rand (ZAR) can become a stronger currency.
What is the prediction for gold prices in 2022?
In 2022, gold could experience its highest price in history. Having already peaked in 2020, gold is tipped to reach the $2 100 per ounce threshold. Several factors explain this situation.
Firstly, inflation in the United States, close to 6 percent, constitutes favourable ground for a rise in the price of gold in the coming months.
Traditionally a hedge against inflation, the precious metal sees its value increase when the dollar is down.
Will the gold rate decrease in coming days?
The health context impacts our economy a little more every day. States are increasing their debt every day and the first impacts are already being felt in the daily life of households. To overcome this, the central banks had announced a debt repayment plan with low inflation as a guarantee.
But that is impossible. Today, inflation appears to us as inevitable and resorting to a safe haven for the protection of one’s heritage is commonplace.
According to figures from Eurostat, there is inflation in Europe of 4.1 percent in October against 3.4 percent in September. The most impacted services are energy (+2.21 percentage points, pp), food (+0.43 pp) and non-energy industrial goods (+0.55 pp).
According to INSEE, in November 2021, consumer prices increased by 2.8 percent over the year. These price indices relate to food (fresh and other products), tobacco, energy, services and manufactured products. Still according to INSEE, the increase is mainly concentrated in energy, which has risen by around 20 percent in 2021.
In summary, faced with a declining economy, household purchasing power is declining. To overcome this, there are safe havens including gold. Its special status makes the yellow metal an effective element in protecting its heritage from the current crisis. It is also in this idea that the price of gold is rising and will certainly continue to rise in the coming weeks.
Is it wise to invest in gold now?
Obviously, impossible to say with certainty because it will mainly depend on your investment strategy and your personal needs and objectives.
But as a general rule, wealth managers recommend investing up to 10 percent of your investment portfolio in gold in order to protect yourself against possible economic downturns, a stock market crisis, and against currency devaluation. of your country or your investments, as is the case today.
It is also possible to buy the shares of companies active in gold mining. These companies benefit from a rise in the price of gold since they exploit the noble metal. By investing in these companies, you are indirectly speculating on the price of gold. These stocks can be seen as leveraged gold.
But the price of these individual stocks can fluctuate significantly.
So be prepared for the possibility of high volatility in these markets. Below is a list of the five largest gold mining company stocks trading through Exness.
Will gold ever lose its value?
The year that has just started could be a little difficult for gold. There are two record years after 2020 and 2021.
However, the acceleration of inflation could have repercussions on the gold metal. Let’s not forget, for example, that in November, inflation reached 4.9 percent in the eurozone. This is a real record since 1991. Moreover, Germany recorded inflation of 6 percent.
It’s simply incredible and it obviously proves that the economic situation at the international level is very complicated. However, if gold is likely to suffer from this inflation, in the long term everything should be fine.
The year 2022 should be a little complicated for the time being. Indeed, the price of the gold metal has fallen by around 6 percent since January 1st. However, specialists agree that gold is balancing out.
The golden metal, as always during economic crises, seeks to adjust. And no doubt, gold will react like a safe haven since that’s what it does in times of economic crisis. Therefore, do not lose confidence, and show a little more patience.
Conclusion
Gold offers good prospects for 2022 and 2023. The price of gold will most certainly follow the upward trend of the end of the year, particularly in relation to inflation. The latter allows gold to stand out from other investments.
The resilience of the yellow metal in the face of past crises has already proven itself and will do the same in 2022. Gold is a shield for your savings in times of economic crisis. The true guardian angel of your finances, it will assume the role that current currencies cannot offer.
Protect your assets now with the purchase of gold.
[Image – Photo by Jingming Pan on Unsplash]
