Why did gold bars grew by 20% in 2 months? What do experts think, and what does stats show? Is it a new golden revolution we are facing?
20% in 2 months. Prices on a roll
When stock markets go down, one of the most ancient assets of the planet faces good times. The beginning of 2016 proved it, since gold prices increased by 20%.
In December, prices of the precious yellow metal fluctuated around $1000 per ounce, and in two months' time they exceeded the important level of $1200. On February 22 it was recorded that gold prices reached $1207.
What is actually going on? Why have investors turned their eyes and purses to gold? Analysts describe this situation as running from danger. It is now the time when investors strive to avoid everything risky – stocks, currencies, oil etc – and protect their capital in a tried and tested way – by buying gold.
Expert opinion: Cohen is calm
Robert Cohen, a manager at Scotiabank's Dynamic Funds, commented on the situation as follows: “Investors are suddenly waking up to the risks in the market, pretty much like what happened in 2008.”
Further he added that this time the process is happening slower than the last time. People study information without haste and gradually turn to such safe-haven assets as gold.
Bloomberg amazed everyone with figures
Partly, the attractiveness of gold improved owing to unattractiveness of other options. Central banks downturned interest rates so much that non-risky assets cannot overcome inflation now.
Bloomberg reports that around one third of sovereign debt of developed countries is negative yielding. These comprise assets of over $7 trillion worth that are doomed to money loss. From this perspective it is easy to notice the indispensability of gold.
Central banks set records
According to a report by the World Gold Council, 2015 appeared to be the second best year in terms of Central banks buying gold for the last 20 years. Among the countries which made the most purchases were Russia, India and China. In total, Central banks bought 336 tons of gold in 2015, which is 25% more than a year before.
The gold rally picks up speed – and there are plenty of factors stimulating it. Follow the updates and don't miss the best moment to buy gold.
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Read more: A passenger from Malaysia tried to sneak through the border 9 gold bars in his belly!
