At the end of last week, the price of gold rose to the level of $1,827 per ounce. The quotes reached a three-month high and confidently consolidated above the important $1800 mark. Gold has been trading in a narrow range around the 1810 level all week, but weak NFP data for August provided the asset with a new upward momentum.
The main supporting factor for gold was the speech of Jerome Powell at the symposium in Jackson Hole a week ago. The head of the Fed did not indicate any deadlines for reducing the quantitative easing program. Consequently, the buying of bonds on the market will not stop, and more than a dozen billion newly printed dollars will enter the economy. In such conditions, the inflation rate will continue to grow. It is not surprising that the gold exchange rate has increased, because the asset is an effective instrument for hedging inflation.
The World Gold Council has published fresh data on the official reserves of central banks around the world. For most of the listed banks, the indicators for the end of July 2021 were taken into account. According to these data, the Central Bank of Turkey increased its gold reserves by 4.1 tons in the seventh month of the year. Meanwhile, the reserves of commercial banks, which they keep with the Central Bank as collateral, decreased by 1.4 tons. As well as Qatar, Poland and Malta have sold some of their gold reserves. At the same time, Brazil increased its reserves by 8.5 tons, becoming the leader. Uzbekistan, Kazakhstan, Russia, France, India and Mongolia also increased their gold reserves.
Seasonal factors may put pressure on the precious metals market in the future. In recent years, the price of gold has regularly shown weakness at the end of September. The last major monthly increase dates back to 2012. On Tuesday last week, the precious metal finished trading at $ 1,815 per ounce. This led to a small loss of profitability in the amount of 0.14% at the end of August this year. A year ago, gold was trading in London at the price of 1,647 euros per ounce. This also means that over the past twelve months, the price of gold has fallen by 6.8%.
For the last four years in a row, the price of the precious metal has shown losses in September. Over the past eight years, the price of gold has shown an increase only once in September. The last major monthly increase in the price by 5% dates back to 2012, that is, during the Eurocrisis. But the following month, the price of gold in euros reached its historical maximum. As statistics show, significant price fluctuations constantly occur in September. It is possible that this year the trend will remain unchanged. Too much depends on the positions of the world's largest central banks. If in September they define their position on monetary policy more rigidly, then the price of the precious metal may fall sharply.
The forecast for the coming week assumes a decline in gold to the levels of 1825, 1820, 1810, 1805 and 1800 dollars per ounce.