27 January 2023 | Macroeconomics

Gold comes to the forefront as a protective asset in crisis

At the present time, the cost of gold is firmly entrenched at $1,900 dollars per ounce. That mark is already very close to a possible maximum predicted by analysts. That kind of dynamics is driven by noticeable dollar weakening and decrease in the yields of the U.S. government bonds.

Investors, who develop a long-term plan, definitely buy gold to their diversified portfolio, because, as we know, the precious metal is now considered as a profitable asset. Its value is primarily due to the fact that in times of recession, traders resort to buying a heaven-asset, and gold is precisely remarkable for its protective function on the market. 

Today it’s evident that the price of gold shows less volatility compared to cryptocurrency, commodity or major stock indices. Purchasing precious metal futures carries less risk than investing in the Nasdaq-100, Dow Jones, S&P-500, DAX or bitcoin, when you consider the volatility of all time.

Even despite the gradual recovery of the markets, gold is still holding its ground, showing an increase since the beginning of this year.

Today, gold is in a winning position due to lower interest rate worries and a weaker dollar.

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Nikolai
Nikolai

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