Gold price gained strongly by 2% to reach $1,945 per troy ounce on Tuesday. Strategists at Commerzbank expect the yellow metal to remain supported thanks to its safe-haven appeal.
Real interest rates have fallen sharply
“It appears that the safety needs of investors are still considerable against the backdrop of the escalating Russia-Ukraine conflict.”
“The high-risk aversion among market participants is also evident in tumbling stock markets and significantly lower bond yields – both factors that make gold attractive as a safe haven. At almost -1%, Yields on ten-year US Treasuries are at their lowest level since the start of January in the US. This also makes gold attractive to investors as no interest is payable on gold.”
“The inflation data for the Eurozone in February will be published today. Given that some country-specific figures have already been released, the inflation rate could even turn out to be somewhat higher than the 5.6% anticipated by the Bloomberg consensus. This could lend further buoyancy to gold.”
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