Buying gold has long been seen as an alternative investment strategy and a store of value. 
 
Gold has proved to be a stable asset in times of economic uncertainty. Adding gold to a diversified portfolio reduces overall risk, as it is not always correlated to stock market movements. 
 
A number of investors also see gold as a hedge against currency depreciation, particularly when inflation rates are high.

Analysis of factors influencing the price of gold

Several factors can influence the quotation of gold. This is particularly true of falling currencies. The relationship between interest rates and the value of a currency is an important aspect of the economic analysis of gold price movements. In general, the prospect of lower interest rates could exert downward pressure on the value of a currency, while higher rates could strengthen it. 
 
A rise in key interest rates by the Federal Reserve (FED) in the United States therefore influences the value of the dollar. If the FED pauses in raising key rates, this will lead to lower yields on US dollar investments, which could make them less attractive to investors. Lower interest rates often reduce the relative return on dollar-denominated assets.
 
Similarly, gold is a real safe haven in times of recession or economic uncertainty. Many investors turn to the yellow metal as a hedge against financial market volatility and currency depreciation. As a result, in times of recession, central banks sometimes resort to expansionary monetary policies, leading to higher inflation. Gold is often seen as a way of protecting against the erosion in the value of money due to rising prices.

INVESTING IN LOUIS D'OR

This is because there is an inverse correlation between the value of the US dollar and the price of gold. This means that when the dollar is weak, the price of gold tends to rise, and vice versa. The quotation of gold is generally quoted in US dollars on international markets. So when the value of the dollar falls against other currencies, the dollar price of gold rises. This makes the yellow metal cheaper for foreign investors, and stimulates demand. This is how prices rise. 
 
Today, in 2023, investors know that various factors can influence gold prices. One of these is US debt. High debt can create concerns about financial and economic stability. 
 
If investors fear that US debt will reach unsustainable levels, this can weaken confidence in the US dollar, leading to an increase in demand for assets seen as valuable safe havens, such as gold. 
 
In addition, international political tensions, armed conflicts or other geopolitical crises can increase uncertainty in the financial markets. In such situations, investors seek out safer assets, such as gold metal, to protect themselves against volatility and instability. 

The current environment, characterised by geopolitical uncertainty, accommodative monetary policies and the global economic context, is therefore largely favourable to the yellow metal.

Deciphering the economic outlook and gold price forecasts

 
Financial markets are complex and dynamic, and the value of gold can be subject to major fluctuations. Gold price forecasts can vary according to the opinions of analysts and market conditions.
 
The outlook for gold purchases by central banks can be influenced by a variety of economic, financial and geopolitical factors. Historically, central banks have used gold as a store of value and a strategic asset. They often seek to diversify their foreign exchange reserves to reduce the risks associated with holding a single asset class.

Central banks' gold purchases can therefore vary from country to country, depending on their specific monetary policies, financial objectives and economic outlook.
 
China, for example, has significantly increased its gold reserves over the years, making regular purchases to diversify its foreign exchange reserves and strengthen its economic position.

As another example, over the last few years, the Polish central bank (Narodowy Bank Polski - NBP) has also made significant changes to its gold reserves, joining other central banks in the trend towards diversification of foreign exchange reserves. In 2022, the World Gold Council (WGC) has predicted record gold purchases by most of the world's central banks.
 
Investing in gold can therefore be a strategy for growing an asset portfolio and potentially protecting individual wealth. For example, it is possible to acquire old gold coins such as Louis d'or, an interesting approach for some collectors or investors.
 
In addition, by anticipating that core inflation will remain high, the FED will have the opportunity to maintain high rates to combat inflation. This, combined with a high dollar, should push up the price of gold between now and 2024. JP Morgan is fairly confident about the outlook for the gold price. Its speculation envisages price targets of $2,000 by the end of 2023 and $2,175 by the end of 2024. The expected gain would therefore be 14% over the next 16 months.

So buying gold or even silver metal would be a sustainable strategy for years to come. It's a solution that many investors see as a way of diversifying their portfolios and protecting themselves against inflation. It is also important to know that the gold market is subject to volatility, and investors need to take these factors into account. Looking ahead to 2023, gold in dollar terms has continued a "superb bullish rally" that began at the low of $1620 in the late autumn of 2022.