in the short term, UBS calls for caution on gold


The Royal Mint, the British mint, issues gold coins that are legal tender – we are talking about coin bullion or investment gold like the South African Krugerrand, or the American Eagles – the most famous of which is the sovereign. Since 1987, the establishment also hits the Britannia: here is the obverse of one of them bearing the effigy of the late Elizabeth II. Its legal value is 100 pounds, but its price depends on the gold it contains, here an ounce troy of 31.1 grams. JKP / World Gold Council

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Between 2013 and 2015, ounce of gold fell from $1,600 to $1,050 after Ben Bernanke, then Fed chief, opted – for a time – for a more restrictive monetary vision. Strategist at UBS, Wayne Gordon, recalls that at the time, “the Fed’s change of footing took the market by surprise», which is not the case in 2022; that inflation was not a problem, and that the dollar, the benchmark currency for gold, was not as strong as it is today. But if the specialist excludes a reissue of 2013, he expects no less “a further weakening of the price of gold».

Gold, which pays nothing, suffers from rising rates

Why? If inflation still exceeds 8% in the United States, the Fed has just begun to give “turns of the screw” which, to date, have not been enough: it will therefore continue. “Real interest rates (i.e. nominal rates minus inflation, editor’s note) will stretch again», while 10-year expectations now exceed 1%, the pain threshold for gold, of which, by definition, the yield (0%)…

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