Gold is currently in an interesting place. It has rallied by 10% in the last three week since hitting a low back at the beginning of October. However, it appears to be struggling to break through the technical level of $2,000/oz. This is because traditional analysis suggests that gold shouldn’t be this high.
Gold prices tend to rise when markets are uncertain. Gold prices are likely to rise due to the global geopolitical tensions triggered by the Gaza conflict. But, it’s fighting against a strong current pushing in the other direction.
What can cause gold to fall?
Gold prices tend to fall when interest rates increase. The US interest rates are soaring. Gold should have dropped. Why? Because gold is a great store of value, but doesn’t generate dividends. Gold is only profitable when the price increases. Gold is actually expensive to own, as it costs you money in lost investment opportunities.
These other things are Treasuries. The US debt is viewed as being the same thing as cash. Treasuries offer interest and, with yields above inflation rates, you can make money holding them.
