Inflation makes gold shine

Since August and its last all-time high at over $ 2,000 an ounce, gold had lost its luster to investors until it fell to $ 1,685. However, this trend was reversed at the end of March: gold has since gained more than 10% to rise to $ 1,870. Despite the return of inflation, central banks assure investors that there will be no change in their accommodative monetary policies and that they will keep their key rates low for a long time to come.

In this context, the winds are extremely favorable for the prices of the precious metal, especially in the United States. “US inflation – at 4.2% – is significantly higher than two months earlier, which means that real interest rates are significantly negative,” says one at Commerzbank. When real rates are negative, investors lose money on government bonds because the yield on these securities is lower than inflation.

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