According to the world's largest recycler and trader of precious metals, Heraeus Precious Metals, the price of gold will continue to rise in the coming year and reach new records. "The growing confidence that the US Federal Reserve has ended its cycle of interest rate hikes and could start cutting rates as early as spring will drive the gold price," said Henrik Marx, Head of Precious Metals Trading, at the presentation of the annual Heraeus Precious Metals Forecast.
Interest rate cuts make investments in interest-free assets such as gold more attractive and typically weaken the value of the dollar. A lower US currency generally supports the gold price. As the precious metal is predominantly traded in dollars, a weak greenback makes the precious metal cheaper on the global market, which ensures stronger demand and therefore higher prices. "Despite high yields on the US bond market and a strong US dollar, gold has done very well - this points to a clear upward trend." Ongoing purchases by central banks and ETF investors will also support the gold price. The strong demand for jewellery in India should also help. In addition, investors could turn to gold as a safe haven in view of the current crises. Heraeus expects a range of 1,880 to 2,250 dollars per troy ounce.