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The lower the real return, the higher the price of gold.
Capital Economics has raised its gold forecast to US $ 1,900 by the end of the year as it expects real yields to remain weak over the next two years.
“As economic uncertainty recedes, demand for safe-haven assets, including gold, is expected to decline,” Capital said. “However, this will only make the price of gold shine a bit, as ultra-low real yields remain a key support. “
The capital also expects groups of investors, worried about the potential for runaway inflation due to stimulus measures exerted on economies during the pandemic, to take refuge in the gold market. Economists, however, believe inflation fears are unfounded and demand for this hedge will decline.
Then there is always FOMO.
“Gold has already hit all-time highs in all other currencies this year, but this shift to record 2011 dollar highs in dollar terms is of course catching all the headlines,” said Adrian Ash, chief research officer. at BullionVault, in Bloomberg. The fear of missing out “drives a flood of speculative money into gold, adding to the strong physical demand in January-June.
MAKING HISTORY IN EUROPE The President of the European Commission Ursula Von Der Leyen and the President of the European Council Charles Michel scramble at the end of the press conference announcing a 750 billion euro aid program aimed at reviving the economies ravaged by the coronaviruses in Europe. The deal came after a difficult 90-hour summit at the European Council in Brussels, Belgium, which ended early on Tuesday. The deal paves the way for the European Commission, the EU executive, to raise billions of euros in capital markets on behalf of the 27 states, an act of solidarity unprecedented in nearly seven decades of European integration. Stephanie Lecocq / POOL / AFP via Getty Images