Any forward-looking statement regarding the forecast of the price of gold should not be used or interpreted as investment advice. Therefore, at a time when inflation remains high for a longer period of time, gold becomes a tool to protect against inflationary conditions. After growing by a few hundred dollars in the first half of the year, the price of gold is expected to grow even faster over the next few quarters with the expansion of the Delta-COVID variant. Given the cyclical nature of the markets, the upward movement in gold prices is likely to remain intact for several more years.
This has made investors seek to invest their money in safer investments, and gold is one of the best investments of its kind. Gold is now retreating from its highs, but it could be forming a bullish flag pattern that could cause prices to rise much higher. Interestingly, there are cases that can affect the price of gold in regional areas that are affected by factors such as weather. This was known as the gold standard, but in 1971, the President of the United States, Richard Nixon, asked the Federal Reserve to stop respecting the value of the dollar in gold and to end its primary use as a monetary value and helped make the asset more of a store of value.
Gold is not an asset that is prone to large price fluctuations or high volatility, but it is known to grow almost constantly as its uses and market desire continue to increase. Of course, gold is also used as a hedge in times of geopolitical uncertainty, since the asset provides more stable value when crises, such as war, are looming. Gold should continue to be sought as a safe haven if there is significant uncertainty about future interest rate levels. One of the most important dynamics of the gold market is that it is cyclical, meaning that it tends to follow cycles.
Gold and inflation also work together, since inflation is one way in which money can devalue quickly, and when this happens, people prefer to keep their money in something that increases in value rather than in something that increases in value, such as gold. But there is a fairly clear relationship between the stability of the neo-liberal financial order (or lack of it) and the demand for gold as a way of preserving wealth. Rising interest rates are generally negative for the price of gold, unless inflation rises even faster.