Volatile, the price of gold? The conflict in Ukraine, which began at the end of February, proved the haven nature of the yellow metal: the price of gold rose in one month by 10% in USD and 13% in Euro, reaching a peak of 2039 on March 8. $ and 1870€. On the same day, the CAC 40 recorded its worst weekly fall since the announcement of the first confinement in March 2020, at minus 10.3%. The countercyclical system of gold contributes to valuing it as a safe investment against risks and crises.
A counter-cyclical development
The price of gold evolves in a way that is generally uncorrelated, even negatively correlated to equities and bonds. After a calm start to the year, the worsening of geopolitical tensions raises fears of a real economic shock and instability on the side of the European stock markets. Investors, therefore, fall back on one of the only assets that perform well in times of crisis: physical gold for investment fears neither inflation nor issuer risks. And faced with the rise in key interest rates, gold fully finds its place as a haven asset by allowing diversification of its exposure to the market. Gold is useful for not putting all your eggs in one basket.
The rise in the price of gold goes hand in hand with that of raw materials, which also experienced a general surge during the first two weeks of March.
An accessible and liquid product
Even if the price of gold has recently peaked, coins and ingots remain accessible to small wallets. This tangible asset cannot go bankrupt: its continuous and real-time quotation is based in France on the London fixing, which allows it to be resold at any time. Nevertheless, physical gold for investment proves its interest over the long term. In the space of 20 years, its value has been multiplied by 4. Special mention for gold coins, which can be resold with a premium of up to 50% of their precious metal value. Universally recognized, the value of gold appreciates at all times and everywhere on the planet.
The gold specialists recommend diversification of the heritage up to 5 to 10% in the physical gold of investment. A few coins or ingots can make all the difference in a savings management strategy: in times of financial crisis, there will always be time to sell to benefit from a price increase.