ZLATO – potenciál pre ďalší rast ceny

Pohyb ceny zlata stále fungoval ako „hedge“ proti slabnúcemu doláru a vzrastajúcej inflácii.

Gold is at multi-year highs after a sharp rally in recent weeks yet according to Danske Bank the outlook remains for further commodity price strength, including gold's, in coming months as the US dollar appears likely to weaken further.

Such an outcome makes economic sense, as the law of one price means commodities cost the same as the underlying supply and demand suggests and what it costs to produce the actual commodity and this doesn’t change if the value of a currency changes.

In other words, the law suggests when the US dollar falls, the price of commodities priced in US dollar terms should rise.

Other factors also come into play, Danske Bank pointing out the move by the US Federal Reserve recently to cut interest rates has also acted as a spur for commodity prices as lower interest rates imply stronger global economic growth, which is supportive for demand for commodities.

This has sparked a rally in the gold market as the classic hedge against a weaker US dollar has always been gold, though as the bank notes this relationship has not been as strong over the past decade or so as the correlation between the greenback and the gold price has only been around 50% over this time. There has been an improvement of late though, as since the beginning of 2006 the correlation has risen to around 70%.

While this would suggest weaker interest rates in the US are a positive for the gold price Macquarie’s research shows the opposite has in fact been the case, with the historical tendency being for gold to be positively correlated with the level of US interest rates.

This causes investors to turn to gold as a hedge against inflation, which makes the recent rally in the gold price since the Federal Reserve cut US interest rates somewhat puzzling from a historical perspective. The broker’s explanation for the recent move is gold prices are now also being influenced by the strength of the Chinese economy, as its growth has sparked additional demand for metals and commodities generally, which has also in recent years produced a strengthening in the correlation between gold and base metal prices.

At the same time the strong growth in the Chinese economy is now beginning to reveal some signs of a pick-up in inflationary pressures, which is spurring additional demand for gold.

This leads the broker to suggest the gold price is now driven just as much by the outlook for growth and inflation in China as it is by demand and growth in the US, a trend it expects will continue in the future.

Source: ARN


"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value."   Alan Greenspan