The bank linked these expectations to many reasons, including the drop in the price of bitcoin, which will mean a shift in investor focus from the digital version of gold to the actual metal.
The bank also believes that the fluctuations in stock markets over the next year would consolidate gold’s position as a safe haven for investment.
However, economist Ahmed Al-Khatib confirmed to “Sky News Arabia Economy” that gold is not a useful investment asset at the present time, and it is not considered among the best investments in the coming period in light of the continued increase in US interest rates.
Al-Khatib indicated that gold prices are trapped in a narrow range, except for what happened at the beginning of the Corona pandemic, when it recorded historical levels above two thousand dollars per ounce.
It is noteworthy that international financial institutions expect the global economy to witness a slowdown in growth during the next year, as the International Monetary Fund expected a third of the global economy to contract during the current or next year, with the continued slowdown in the three largest economies in the world, which are the United States, China and the euro area.
This global slowdown may support central banks’ tendency to slow down the pace of rate hikes, which supports gold prices, which managed during November to achieve their best monthly gains since July 2020.
Realizing these gains came with the support of increasing expectations of a slowdown in the pace of interest rate hikes from the Federal Reserve during the upcoming meetings, in addition to the decline in the value of the dollar against other major currencies.
For his part, the Executive Director of VI Markets, Ahmed Moati, confirmed that gold managed to record remarkable increases, especially after signals from the US Federal Reserve to reduce the pace of raising interest rates in the next meeting.
Markets widely expect the US Federal Reserve to raise interest rates by half a percentage point at its next meeting in December.
He added that the US data turned the tables on gold, especially after it was better than expected, which pressured the yellow metal to lose most of the gains it had recorded and fall below $1,780 an ounce after it managed to exceed $1,800.
Moati explained that the recent US data gave a signal to investors that the Fed will continue to tighten its monetary policy.
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