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The escalating trade conflict between the United States and China and a looming currency war are causing a flight to gold. In the space of a few months, the Gold price from less than $1,300 to more than $1,500 per troy ounce, the highest level since April 2013. In euros, the price of the precious metal is even approaching the all-time high of €1,380 per troy ounce from 2012. Not only investors are seeking refuge in precious metals, savers also see more reason to take advantage of negative interest rates with the prospect of negative interest rates. buy gold.
Last week, the price of gold rose after Trump's announcement of new import tariffs. After that, the value of the yuan started to fall, because the Chinese central bank wants to leave the value of the currency more to the market. There is still a lot of uncertainty about this devaluation, but the US government at least sees malicious intent in it. They accuse China of manipulating the value of the currency and are considering taking new steps.
Investors are seeking refuge in safe havens as tensions between the world's two largest economies continue to rise. Long-term government bond yields have fallen further, leading to over $15 trillion debt securities now have a negative interest rate. It is expected that this development will also put pressure on savings rates in the longer term. ING Considering even a negative savings rate. That prospect makes precious metals an attractive alternative.
This was also evident from a recent poll on the Telegraaf, in which readers were asked to choose a safe haven. Of all respondents, 61% preferred gold, compared to only 22% for defensive funds and 12% for Bitcoin. U.S. Treasuries, one of the most liquid instruments for financial institutions, are the least popular among Telegraph readers, at 5%. We wonder if that percentage would be higher for European government bonds with negative interest rates.
Also at Holland Gold we notice that the interest in precious metals is increasing, because it is very busy in the trade. Initially, the price increase mainly caused profit-taking, but now that the prices of gold and silver continue to rise and uncertainty persists, a lot of precious metal is being purchased again. Not only by existing customers, but also by new customers.
It is striking that in recent days there have also been many silver is sold. The silver price caught up in August, but is still relatively low relative to the gold price. The ratio between the two precious metals stands at 88 at the time of writing, much higher than the long-term average. Silver is generally more volatile than gold.
Gold price has risen sharply in recent months and is approaching all-time high of 2012
