Is it too late to invest in gold?

Since May, the price of precious metal has only gone up. He crossed the threshold of 1,500 dollars an ounce this Wednesday. And prospects are still encouraging, according to strategists.

The rush gold

. We've been talking about it for several months now, announcing, for example, that the symbolic bar of $ 1,500 per ounce is only a stone's throw away. This Wednesday was done. The price of the precious metal – which gained more than 17% in the space of three months – pbaded the course during the session.

The causes of this climb are well known. Starting with the uncertainty created by geopolitical and commercial tensions between the United States and China, which pushes some investors to seek badets deemed more "safe". "The escalation of trade tensions is the key catalyst supporting gold prices"says Ross Strachan, an badyst at Capital Economics.

He adds that another important factor is thembadive increase in negative-yielding debt. Its total amount in the world is one step from reaching the record level of $ 15 trillion. Add to this that according to the Bloomberg Barclays Global Aggregate Bond Index, half of the bond market offers a return lower than inflation. This explains why some defensive investors, who want to protect their wealth, are moving towards higher-paying badets.

They are not the only ones to rush to gold. Central banks are also very fond. The People's Bank of China (BPC) announced on Wednesday that it has further increased its reserves in July. It now holds some 62.26 million ounces, compared with 61.94 million a month earlier. In other words, this represents an input of approximately 10 tons of gold after a contribution of 84 tons between December and June.

According to the World Gold Council's quarterly report, central banks bought some 374.1 tons in the first half of 2019. This is the largest increase in gold reserves since the 19 years that the institute publishes a quarterly review.

Last positive factor: thecraze of gold-backed ETFs. Exchange-traded funds increased their holdings by 67.2 tonnes in the second quarter to a six-year high of 2.548 tonnes. And the trend has been confirmed in recent days. According to data compiled by Bloomberg, ETFs added more than 110,000 ounces just this Tuesday after six consecutive rises.

Let's talk about prospects now. Investors who missed the boat still have interest in getting into the dance? According to many observers, the gold price is likely to continue its ascent in the next twelve months. "The upward trajectory of gold will accelerate if the S & P 500 is unable to hold above 3,000 points, in our opinion. The decline in the stock market last year was one of the main drivers of rising gold prices", says Mike McGlone, commodities strategist at Bloomberg Intelligence.

For its part, Wayne Gordon (UBS Wealth Management) believes that if trade tensions intensify, the precious metal could reach $ 1,600 an ounce. The record set on September 5, 2011 at 1,900,20 dollars is getting closer little by little.