Over the past five years, the price of Gold has seen an increase of 53%. Starting from an average of US$1,240 in July 2018, it has climbed steadily to reach approximately US$1,900 in early July 2023.
Gold Price in US $ July 2018 – Date
Gold has exhibited a modest increase of approximately 6% year-to-date despite high inflation in many economies. But over the last five years, it has shown its resilience during a combination of rise in producer prices, money supply and bank deposits. Compared to other components of the Bloomberg Commodity index, gold has emerged as a top performer on an annualized basis.
Gold is still expected to endure as the global economy moves past the Federal Reserve’s hawkish monetary stance, significant levels of uncertainty and volatility, and global weak growth. Data shows central banks in emerging markets (EM) are actively acquiring gold, driven by geopolitical risks and the trend of de-dollarization, supporting its trajectory for price appreciation, albeit potentially at a slower pace than previously witnessed. Notwithstanding, the market does not expect gold price to return to the peak of US $2074 of August 2020, given the interest rate dynamics today. In summary, the outlook for gold suggests a positive upward trend, albeit with a more gradual progression, as market conditions evolve, and the Federal Reserve’s monetary policies come into play.