Tuesday, October 4, 2022

Gold price slips

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Lowest level since April 2020

Gold price slips

Gold prices fell sharply on Friday, hitting their lowest in more than two years. Market observers explained the downturn shortly before the weekend with a sharp rise in interest rates on the capital markets.

Gold is currently as cheap as it was last spring 2020. The price of gold is falling because fixed-interest securities are becoming more attractive to investors again due to rising interest rates. (icon picture)

This makes fixed income securities more attractive to investors than investments in gold. In midday trading, the price of a troy ounce (31.1 grams) of the precious metal fell around $27 to $1,644 after hitting its lowest level since April 2020 at $1,641. At the same time as the gold price plummeted, there was a sharp rise in yields on the government bond market.

“In view of the rapid rise in interest rates, gold as an interest-free investment is currently not able to score points,” commented Commerzbank’s commodities experts on the current market development. The sharp rise in capital market interest rates was triggered by the latest interest rate hikes by leading central banks. (SDA)

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