Talking about gold fever may be a bit premature, but it is striking that, just beginning the first minutes of the first session of the second quarter, the price per ounce had a revaluation of almost 2%.
In the newsletter of markets made with Five days, my forecast for this year had been a strong revaluation of the ounce of gold, something that, for the moment, has already materialized in an increase of almost 10% so far this year. The idea is that at the best time of 2024 this increase will reach 30%.
But even more striking is that this rise in the price of an ounce of gold has been compatible with the appreciation of the dollar against the euro, which, since the beginning of 2022, has been 5%, so anyone who would have invested in gold in those dates (using the euro as the financing currency) accumulates a revaluation of its investment of 28%, of which 23% corresponds to the rise in the price of gold and 5% to the appreciation of the dollar against the euro.
Most of the time, it is normal that the price of the dollar and that of gold move in opposite directions (that is, when the price of gold rises, the price of the dollar falls) but there are always exceptional periods in which both can appreciate. or depreciate. And it seems that we are in one of those moments in which both appreciate or, at least, the rise in the price of gold is much higher than the depreciation that the dollar may have. The latter is what has happened for a month and a half: while an ounce of gold rose in price by 13%, the dollar depreciated only 0.6%.
Everything seems, therefore, to make investing in gold seem like a winning horse this year, without there being a convincing explanation for it.
It is sometimes argued that the central banks of countries not aligned (i.e., aligned with Russia) have been buying gold and rejecting the dollar as a way to accumulate reserves in light of the sanctions that the United States and its Western allies plus Japan imposed on Russia after the invasion of Ukraine, among which is as most notable was the freezing of the assets it had in Western banks.
The explanation is reasonable, but between what is reasonable and what is real there is often a great distance. Among the counterarguments that can be brought up is that, despite the invasion of Ukraine taking place in February 2022, the price of gold not only did not have a strong bullish reaction immediately, but between February and November That year it fell 21%. That is to say, either the central banks act with a delayed effect, taking nine months to think about it, or other factors acted that had nothing to do with what the central banks did and that, in any case, nullified the effect of the purchases. carried out by them, if there had been any in significant proportions.
Other times the rise in the price of gold is explained by the fall in real long-term interest rates of the dollar. But on this occasion, since the beginning of 2022, the real profitability of the 10-year United States public debt has gone from -6% to +1%, while gold appreciated by the aforementioned 23%.
As on other occasions and for practically any market, there is no good explanation that can be general and in all times and places that the abundance of counterexamples does not end up destroying.
If talking about a gold fever is premature, where we are already late is in describing what is happening in this market as a cocoa fever: during Easter the price of a ton exceeded $10,000, which represents an absolute historical maximum for a historical series of prices that goes back to 1971. In fact, last December the price of cocoa exceeded the previous historical maximum, which had taken place in 1977. The vertical rise in the price has meant a cumulative revaluation (since in September 2022 began its start) of 372%.
In this case there is also an explanation ad hoc reasonable (bad harvests for several years) as usually happens with other phenomena, but that no one or almost no one applied preventively (and even less in such an extreme way) as to predict such a rise.
The fact that the price of cocoa was depressed for 42 years seemed like a good basis to bet on an exceptional rise, but anyone who tried it in the past saw their bet end in huge losses.
That's what happened in 2010 to a trader of cocoa which, due to its way of proceeding through mysterious purchases, was then nicknamed chocfinger. That is, the Goldfinger (James Bond movie) of chocolate. His real name was Anthony Ward (Armajaro Holdings) and he is known for having made a massive purchase of 241,000 tonnes of cocoa worth £658 million that ended in disaster. We will probably see the same tears from then again in this market. They may not be that far from being produced.
Juan Ignacio Crespo He is a state statistician and financial analyst
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