Is the era of expensive gold over?

After the announcement of the results of the US presidential elections, the price of gold, which recorded several price records this year, began to decline.

What is this? Is it a change in trend or a temporary correction? Let’s find out.

Historically, gold is considered the best financial investment – it is a reliable physical asset and its value grows steadily. But with the development of the global financial market in general and financial instruments in particular, gold has become… It started to decline As investors began to diversify their investment portfolios and pay attention to other financial instruments.

But the past 20 years, when the world experienced more than one financial crisis, have proven that gold not only remains one of the safest assets, but also constantly brings profits to investors. While in the early 2000s the cost of an ounce of gold was about $400, and on the eve of the 2008 crisis it was about $1,000, in 2011 it was just under $2,000.

In 2024, gold set several records at once, and in October 2024 its price almost exceeded $2,700. Global demand for gold grew by about 5% in the third quarter of 2024, setting a record high and raising consumption to more than $100 billion for the first time.

The reasons for this process are completely global: economic and political uncertainty and instability in the world, the deteriorating situation in the Middle East, and expectations for the results of the US presidential elections. As I already wrote, in September, the US Federal Reserve cut its benchmark interest rate by 50 basis points for the first time since 2020, causing US sovereign bond yields to fall, and in early November – by another 25 basis points.

According to financial laws, rapid growth is followed by a temporary decline in prices. This has already happened In the last decade of October. After the US election results were announced, the price of gold continued to decline: its price It fell to $2,600 per ounce.

Is this the final correction? We’ll see. But we should not rule out gold, as it is likely to remain an attractive instrument for capital protection.