In the short term, the negative impact of these trade tensions has only caused a modest response from the price of gold. As mentioned earlier, I believe that the two factors that will have the biggest impact on the price of gold will ultimately be monetary policy and geopolitics. Any forward-looking statement regarding the forecast of the price of gold should not be used or interpreted as investment advice. Therefore, there are still many uncertainties and factors that will support the increase in gold prices in the long term.
Rising interest rates are generally negative for the price of gold, unless inflation rises even faster. In fact, the winter months, from December to February, tend to be the strongest time for gold in most years, and the opposite is the case during the summer. In addition to this expected “turn”, there are other unavoidable realities that should presage an increase in gold prices. I use a combination of technical analysis and observation of market fundamentals to make my predictions about the price of gold.
One of the most important dynamics of the gold market is that it is cyclical, meaning that it tends to follow cycles. Given the cyclical nature of the markets, the upward movement in gold prices is likely to remain intact for several more years. Gold should continue to be sought as a safe haven if there is significant uncertainty about future interest rate levels. Let's return to the idea of cyclicality in the gold market and to future patterns that rhyme with past history.
Therefore, people like to have gold during times of higher inflation, which could be a great catalyst for rising gold prices in the future. From the late 1990s to the first decade of the 21st century, gold was in a prolonged bull market.