Analyst Osadchy assessed the prospects for growth in the price of the precious metal
In the next six months to a year, the price of gold may rise by 25%. After the recent «retaliation attack» Iran to Israel on the night of April 13, this forecast was given by Citigroup analysts, pointing out that in conditions of geopolitical uncertainty, investors around the world are beginning to buy safe assets. On the morning of April 19, Israel launched a retaliatory strike on targets in Iran, so none of the experts now dares to talk about stabilizing the situation in the Middle East. A side effect of this confrontation for Russians may be an additional opportunity to make money on gold. How much the precious metal will grow and in what form it is worth buying, “MK” said the head of the analytical department of BKF bank Maxim Osadchiy.
— The price of this metal has reached a historical high due to the conflict between Iran and Israel. On April 1, Israel attacked the Iranian consulate in Damascus (Syria). In response, on the evening of Shabbat, April 13, Iran launched a missile and drone strike on Israel.
In April, before the start of the Iranian attack, the price of gold grew by leaps and bounds. Already on April 12, a historical record was set – The level of $2430 per ounce (31.1 grams) was broken. However, the attack itself did not impress the market too much, as it was not effective – most of the drones and missiles did not reach Israel, and 99% of the drones and missiles were shot down.
— “Fear has big eyes.” The classic advice of brokers worked: “buy on expectations, sell on facts.” However, the price of gold this week stubbornly strived towards the $2,400 level, reflecting market fears about a possible “response” to the $2,400 level. Israel, which could become a trigger for war in the Middle East. «Micro-response» arrived on Friday, April 19, but was also more of a demonstrative nature. Accordingly, the price of gold reacted to this “dance with drones” only weak growth, in the hope that the parties will come to their senses and not allow the conflict to escalate.
— If a war breaks out between Iran and Israel, the price of gold may exceed $3,000 per ounce. And in general, the destabilization of the geopolitical situation contributes to an increase in the price of gold — a classic asset that protects against geopolitical risks. In addition, gold is also an asset to protect against inflation, which is also growing due to geopolitical conflicts. Gold has made a historic breakthrough and is unlikely to fall below the $2,000 level in the coming months, where it has been for many years.
— No. The «golden rally» There are at least three more important reasons. The first — Central banks of China, Turkey, India and other developing countries are actively buying gold. An example of the seizure of Russian and Iranian assets — a powerful incentive for such investment. Tensions in US-China relations — an additional incentive to replenish China's gold reserves. The Central Bank of China has been increasing its gold reserves for the 17th month in a row.
The second reason — reaction of the Chinese population to the fall of the Chinese stock market and real estate market. The Chinese are actively buying gold as an alternative investment.
The third reason — the expected transition to lowering the Fed key rate in the second half of the year. The logic here is simple: the bet is down — dollar down — gold up.
— Yes, they also made a moderate contribution to the “gold rally”. Compatriots are actively buying the precious metal after the abolition of VAT on the purchase of gold bars and personal income tax on their sale. Deputy Minister of Finance of the Russian Federation Alexey Moiseev said that in 2023 Russians bought 95 tons of gold bullion. Meanwhile, in 2021 — until the abolition of VAT on the purchase of gold bars and personal income tax on their sale — only 7 tons of physical gold. However, by the end of 2024, Russians will have to pay personal income tax when selling gold bars.
— Compulsory medical insurance has a number of significant disadvantages. Firstly, the lack of DIA insurance. Secondly, you will receive from your account not precious metals, but rubles in accordance with the selling price of precious metals set by the bank, that is, an arbitrary price. Thirdly, compulsory medical insurance, as a rule, does not generate interest income. There are a number of other instruments that are in one way or another related to precious metals: indices, derivatives, funds, shares of gold mining companies, but all this is not for non-professional investors. Gold coins — rather, a tool for collectors and for investors specializing in this area. For non-professional investors, investments in physical gold in the form of bars are most preferable. Of course, precious metal bars are not a very convenient asset, requiring additional costs — transportation, storage, verification of authenticity, and they do not bring interest. However, its role of protection against “black swans” is limited. and it does a good job of inflation. It is considered reasonable to hold about 5% of assets in physical gold.