Gold price goes up as the precious metal becomes a popular safe-haven asset

The gold price grew significantly during the previous trading session and exceeded $1800. It happened against the backdrop of the dollar’s depreciation against the currency basket. However, the prospects of gold are still unclear because of increasing interest rates and fears of recession.

On Tuesday, the price for precious metal grew strongly after a sharp price hike of the yen, which hurt the dollar and reinforced fear of an increase in interest rates. This price jump was caused by the fact that the Bank of Japan changed its ultra-loose monetary policy for the first time in almost a decade.

The Japanese central bank increased the range for acceptable price fluctuations for benchmark government bonds. It indicates possible policy tightening next year. 

This step was made after hawkish signals from several central banks from other developed countries. Such a situation shows that in 2023, interest rates in the whole world will continue to grow. And although this prospect is quite unfavorable for the precious metal, the likelihood of an impending economic downturn has increased interest in gold as a safe-haven asset.