Gold may continue to rise in price after the completion of the Federal Reserve’s (FRS) rate hike cycle. On August 18, Izvestia was told about this by Nikolai Ryaskov, Managing Director for Investments of the UK PSB.
“Gold is one of the traditional defensive assets during high currency volatility in financial markets. Usually, its dynamics is inversely proportional to the movement of the dollar, but in the conditions of rate hikes, gold was worth about $1.8–2 thousand in 2023. We assume that the Fed’s rate hike cycle is close to completion. The dollar index may decline, which will lead to a further rise in the price of gold,” he said.
The expert said that due to the high fluctuations in its value, gold is effective only as a long-term investment for 10-15 years. An alternative to it may be replacement bonds.
“They can bring an additional yield of about 8-9% per annum, which may be more attractive than investing in gold,” Ryaskov said.
Markets for other precious metals such as silver, platinum and palladium are still under pressure, the specialist said.
“The Chinese economy is not showing significant growth, and the Chinese authorities are not significantly stimulating it. However, the completion of the US Fed’s rate hike cycle should support these assets,” the analyst said.