gold Hits Record High โขas Economic fears โRise,Future Remains Uncertain
PRAGUE – The price of gold reached an all-time high for the fourth consecutiveโ day,surging 25% as September โto approximatelyโ 87,640 Czechโ crowns per troy ounce (31.1 grams). โAccording to Creditas Bank Chief Economist peter Dufek, this increase is โlargely driven by investor โฃfear stemming from global uncertainties โlike geopolitical tensions and inflation.
“I sometimes say that theโข price of gold is a function of fear,” Dufek explained. “Usually when there is a threat of war or tension or inflation, many investors turn to gold.”
The rising price isn’t solely attributable to fear,though. Dufek notesโฃ increased activityโ from central โขbanks, particularly China’s, in โคtheโ gold market. โChina, running substantial โขtrade surpluses, is logically diversifying its โฃholdings away from US dollar-denominated assets.โข “China โhas a choice whether to use the accumulated dollarsโฃ to buy US bonds or something โขelse. So when he partially diversifies into gold, he behaves completely logically andโข correctly,”โ Dufek stated.The Czech National Bank has also contributed to demand, purchasing 50โ tons of gold for its reserves.
while gold’s historicalโฃ appeal resurfaced with recentโฃ inflationary pressures, Dufek cautions against predicting future price movements. “It’s not like stocks where you can calculate how profitable a company is. With โฃgold, it’s all about demand and concern,” he said. โ”It’s part ofโข the portfolio – why not? But it is up to each of us how much โคwe are willing to โขspeculate.”
He further emphasized the difficulty in determining a “essential price” for gold, adding definitively, “Noโ one can say yet whether the price willโค continue to rise.”
Theโค price of silver is also experiencing an upswing,โ which Dufek attributes to its broader range of industrial โapplications, โฃnoting it “has โคa deeper story” thanโ gold. Heโ recalled a similar, though less dramatic,โ priceโค surge around 1998 when the Czech National โBank was selling โits gold reserves.
