The impact of the war in Eastern Europe continues to be felt worldwide and upset the commodity markets. At the beginning of the week, the International Monetary Fund (IMF) warned that the war would reduce global growth expectations and increase consumer prices. Meanwhile, although gold prices are experiencing a slight decrease, some experts say that there are still various reasons for keeping gold in the portfolio. Here are the details…
Strategist: Long -term investment makes sense
Since the IMF states that the war will decline globally economic growth expectations, there are many reasons for investors to have valuable metal portfolios, even if prices begin to fall. InveSCO’s chief investment strategist Kristina Hooper said, “You don’t know when the next geopolitical event will be. You don’t know when the next inflation threat will hit, so it makes sense to make long -term investment in the commodity and under the commodity.”
Many analysts said that rising inflation continues to be the biggest reason for investors to hold some gold. Some analysts recommend taking 10-15 percent position in precious metal. In addition to the sense of rise underneath, the FED has a clear monetary policy plan. Many analysts said that gold traditionally performed badly before a new tightening cycle, but increased even more after the path was determined.
Focus on inflation for gold prices
According to Neils Christensen from Kitco, therefore, we can see the underlying power of the gold market. Kriptokoin.comAs we have reported before, the Fed announced that it could increase interest rates seven times this year. However, prices have managed to support over $ 1,900 per ounce. Inflation is the biggest reason why gold can withstand the Fed’s new tightening cycle. The latest CPI figures showed that annual inflation increased by 7.9 percent in February. George Milling-Stanley, the Gold Strategist of State Street Global Advisors, used the following statements:
If the FED really applies the plan that will increase interest rates to 1.75 percent by the end of the year. Interest rates will remain below 2 percent this year. I don’t think the markets have much to worry about. Since we know what awaits us for nine months, we will focus more closely on inflation figures.
