The business world has just ended a week like no other. In Paris, for example, the CAC fell by 0.26% while remaining at more than 5 000 points. As for the United States, Wall Street recorded sharply rising values. The release of the employment figures also contributed to this rise by Wall Street. Also in this country, various household spending items are also on the rise, far exceeding expectations. On the foreign exchange side, the dollar is down while the European currency has made an interesting recovery. But the surprise came on the metals side with gold setting a new record for the whole month of August.
Hardly anyone expected it. It is true that there were some analyses foreseeing a leap in metals and particularly gold. But the latter was a complete surprise by setting a considerable record. Indeed, the precious metal " or " has jumped by almost 30% since the first days of the year. In addition, it is determined to finish the current month of August at over 1960 per ounce.
Indeed, it should be recalled that the yellow metal had already signed a record by reaching 2089.20 dollars per ounce at the beginning of August 2020. It is considered a safe haven in the metals market. That's why investors are buying gold. But these are not buy-and-hold transactions without a specific objective. The objective is well known to specialists in this market.
When investors buy the yellow metal, it is particularly to hedge their portfolios against a possible devaluation of the various currencies. This devaluation could be the result of the various ultra-expansionary monetary policies implemented by central banks. In the absence of major changes or events, however, gold could continue to rise in the coming months. Thus, it will be supported by the positive evolution of inflation expectations. But that is not all.
According to the various analysts most influential on the metal market, the rise in the yellow metal will not only be the result of rising expectations. Apart from that, gold will benefit from the recovery in demand from some key sectors. These are industry and jewellery, not forgetting demand from central banks. On the other hand, the variation of the various currencies is also interesting this Friday.
On the exchange rate side, the dollar has been affected by the prospect of low rates over several years. It then falls by 0.76% in front of a basket of reference currencies including the euro. The latter comes back above 1.19 dollars (+0.69%). As for the yen, it climbs 1.15% ahead of the dollar at a rate of one dollar for 105.32 yen. That's its highest in more than a week. This is how currencies have evolved this weekend.