There are good times for gold: The world has not become safer in recent months, but especially the wind turns on the interest rate markets. The yellow precious metal, caught for years in a sideways movement, has now broken out.
For the first time in years, the gold price in Asian trading jumped above the $ 1,400 per troy ounce mark. Up to $ 1,411 went up. This was not only a new record for the year, but also the highest level since September 2013. In early European trading, the price of gold initially fell below the round mark again.
The recent rally in the gold price is primarily due to the Fed interest rate decision on Wednesday evening. Although the Fed had left the key interest rate unchanged, it signaled readiness for action and interest rate cuts later in the year. By now, market participants are expecting a first rate cut by the end of July.
Already in recent weeks, the precious metal had profited from the expected interest rate turnaround in the US and gained ten percent in June alone. Calculated in euros, the gold price has now reached the level of summer 2016.The price of silver jumped significantly up to $ 15.50 per troy ounce, but is still far from previous highs, which is also related to the property of silver as an industrial metal.
Interest rate development is extremely important
The price reactions show how eminently important the interest rate development is for the valuation of precious metals. Because they do not yield regular income such as interest or dividends, they will become relatively less attractive in an environment of rising interest rates, as prevalent in the US until the turn of the year.During the euro crisis of 2011, the gold price had reached historic highs of over $ 1,900. Two years later, when the US Federal Reserve first hinted at tightening its loose monetary policy, it again trended down sharply.