Gold does not bear interest or dividends. Fixed interest securities, for example, are much more attractive in this respect. But when interest rates fall, as they do now in the US, gold becomes interesting again. This is one of the most common explanations for the current boom.
The essential reason
But there are other, more substantial reasons, says Gabriele Widmann of DEKA Bank to German public media ARD: "What has driven the price of gold much more strongly than interest rates in the US in recent years and months is the policy of central banks in emerging markets that are now increasing their gold holdings.
In this case, we are mainly talking about the central banks of China, Russia and Turkey, which are currently increasing their gold holdings enormously and thus raising the price of gold. But why do they do it?
"They all want to reduce their dependence on the US dollar," Widman explains. "Basically, the US dollar is the world's number one currency and gold is the world's number two currency. And if you decide you want to become less dependent on the dollar, then you buy gold."
Widman also points out that traditional industrial countries, such as Germany, have significantly larger gold reserves. The Bundesbank holds four times more gold than China. But China and co want to catch up, which means the rise in gold prices is likely to continue, the expert predicts.
What other factors determine the price of gold
Thomas Kulp from DZ Bank believes that private consumption - that is, the investment behavior of smaller investors - has an even greater impact on the price of gold. And this is because investors simply lack alternatives, and interest rates in the US and the Eurozone are on a downward trend.
But how far can the price of gold go? Optimists are talking about $3,000 per troy ounce. At DZ Bank, they consider $2,800 per troy ounce to be more realistic. Lower bond market yields, continued geopolitical uncertainty, the US election and continued high demand from central banks speak in favor of this. "These are all trends that do not give us reason to think about a possible reversal," says Kulp.
This week, the price of gold reached a new all-time high, and 2024 promises to be the best year for gold in history - with a 26% increase in price. This has never happened before. No wonder this record will be surpassed by the end of the year.