Gold in perpetual growth
In recent decades, the price of gold has continued to rise. Indeed, the Value of gold is constantly increasing so that a kilo of gold was worth 7865 euros in 1999. Twenty years later, that same kilo was worth 36 335 euros, almost four times its initial value.
The reason for this inflation lies in the specificities and the advantages of this golden metal, so coveted by enthusiasts, otherwise called “golden beetles”. On the one hand, it is a precious metal given its small quantity available worldwide and the difficulties inherent in its extraction. Because of its inevitable scarcity, gold remains a pledge of credibility and economic reliability in the eyes of investors.
On the one hand, it is a precious metal given its small quantity available worldwide and the difficulties inherent in its extraction. Because of its inevitable scarcity, gold remains a pledge of credibility and economic reliability in the eyes of investors.
In light of these observations, this monetary is a safe haven on the stock market and allows for the vicissitudes of the game of supply and demand.
On the other hand, soaring inflation in the price of gold correlates directly with the value of the US dollar and more specifically with that of the public debt. For good reason, since 1900, all the major nations have seen the value of their currencies collapse. Medium and long-term bank investments are not always appropriate because of their particularly low rates. Additionally, yields are likely to be negative in bond markets, as they are now.
This is the reason why gold constitutes a surplus value in the economic and financial market because of its constantly increasing price.
Gold and the coronavirus
The current global health crisis is a perfect illustration of the safe haven of gold. The collapse of financial markets around the world has allowed the price of gold to soar. Between March 17 and April 27, 2020, the price of gold increased by 20% on top of the increase in gold orders by specialist investment firms.
In addition, analysts and economists agree that rising public debt and the depreciation of traditional currencies irreparably increase the value of gold.
Ultimately, credibility and reliability are the watchwords of gold, making a possible increase in the price of gold metal to 100 000 euros per kg in 2040.
Article written by Emeline BODEVING