Weekly update - Gold hits $2,000 and proves the doubters wrong!

This week’s update is written by Stewart Moyles in our precious metals team.

The gold price hit $2,000 on a few separate occasions during April 20231, giving investors the result they had been hoping for throughout the whole of 2022.

While it’s true that in 2022, monetary tightening and spiking inflation were at the forefront of broadcasts across the world, no real crisis materialised, which led to the feeling that gold had disappointed somewhat. Any doubts investors had of gold then, have surely been conquered given its performance of 2023 so far.

During Q1 of 2023 gold rose by 9.2%1, driven in part by fears of an economic crisis and ongoing geopolitical friction. When Silicon Valley Bank collapsed in dramatic and public fashion, Credit Suisse refused funding from investors before being bought by UBS and the FED raised rates by 25bps not once but twice, gold kept it’s cool and made steady increases from $1,800 at the start of the year to close out Q1 2023 at $1,9782.

For April of this year, gold’s lowest price was $1,973 with a high of $2,0482, the highest price since its record high of $2,067 set in August 2020. This has attracted existing and new investors to gold not least, Central Banks, who accumulated gold at the fastest pace on record in the first two months of 2023.

 

USD (oz)

EUR (oz)

JPY (g)

GBP (oz)

CAD (oz)

CHF (oz)

INR (10g)

RMB (g)

TRY (oz)

AUD (oz)

31 March 2023 price

1,980

1,826

8,456

1,605

2,676

1,812

52,308

437

37,971

2,961

March return

8.5%

5.9%

5.9%

5.7%

7.5%

5.4%

7.9%

7.5%

10.2%

9.2%

YTD return

9.1%

7.8%

10.6%

6.9%

8.8%

8.1%

8.4%

8.8%

11.9%

11.2%

Source: World Gold Council

Golds resilience in 2022 was, in no small part, because of its diverse sources of demand and whilst concerns over a banking crisis have eased, geopolitical tension and cracks formed from unprecedented monetary policy are beginning to show. The first part of 2023 has demonstrated that gold is not just resilient in times of uncertainty, but also a high performing part of a well-rounded portfolio.

We hope you have a good week.

Due to the Liberation Day bank holiday in Guernsey and Jersey, our next weekly update will be on Wednesday 10th May.

Sources:

  • 1 World Gold Council
  • 2 LBMA
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