The gold price last rose on 13.04. reached a new 1-year high of around US$2048. This was at least partly due to the after-effects of the banking crisis. Since for a short time much uncertainty was spread about the effects of the 3 bank failures from the USA and the takeover of Credit Suisse, many investors fled into the precious metal. The high national debt of the USA is also likely to play a role in the currently still high price.
But due to the sharp decline in inflation in the U.S. and the simultaneous interest rate hikes, the precious metal could soon be back in the red. For example, U.S. inflation is currently only 5% year-on-year for the month of March. At the same time, the interest rate of the U.S. central bank FED has also recently been raised to 5%, which would theoretically cancel out the loss of value of money for investments at the prime rate.
As a result, the dollar is likely to strengthen somewhat again, thus increasing demand for the U.S. currency. Conversely, this could also cause the price of gold to fall again. However, one should still not lose sight of the high national debt and the FED’s recent problems with the banking system. This is because it is unlikely that the Fed will continue to raise interest rates due to the decline in inflation. If anything, interest rate cuts could soon follow again. But the further course of inflation also remains uncertain. After all, U.S. core inflation is still at a level not seen in 40 years. However, based on the economic data, the gold price should be seen bearish in the short term.