Gold continues to be an attractive safe-haven asset amid recent financial turmoil. At the moment, it is consolidating around $2,000 per ounce, as there are many factors causing financial concerns, including the likely interest rate hike by the Fed at the upcoming monetary policy meeting.
Most believe that the US central bank will raise rates one last time, and then hold them until inflation is under control. According to the CME FedWatch Tool, there is an 80% chance that the Fed will announce a 25 basis point increase next week.
The divergence of opinions and positions in global monetary policy will continue to harm dollar and support gold prices, primarily because the latter maintains a strong position in protecting investors from further market shocks.
In the banking sector, another wave of fear is beginning to grow as the First Republic Bank announced that it lost $100 billion in deposits in the first quarter of 2023. This happened before it received $30 billion from major banks in an attempt to restore confidence in the sector.
Also, an analysis by commodity investor Dennis Gartman shows that gold has the best results in the portfolio when he was the chairman of the investment committee of the University of Akron Fund. Two years ago, Gartman reduced his equity stake by 3% and converted it into gold.
In his personal investments, he confirmed a bullish position in gold and Treasury bonds, adding that in terms of equities, he is also bearishly-oriented in the long term.
