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Gold climbs upward as US interest rates soar to highest in over 20 years

Gold climbs upward as US interest rates soar to highest in over 20 years
Ana Zirojevic

After the United States central bank expectedly increased interest rates to the highest in over 20 years (but hinting at a pause in the future), gold has reacted with a strong upward move, signaling its correlation with the rising interest rates as observed in some instances before.

Indeed, the Federal Reserve has hiked interest rates by 25 basis points to 5.25% – reaching the highest levels seen since January 2001, after which the price of gold soared to $2,052 per ounce, currently correcting at $2,041, according to the latest information retrieved by Finbold on May 4.

Gold 1-year price chart. Source: BullionVault

Since the year’s turn, gold has been following a generally upwards trend, rising 11.59% from its price on January 1, which stood at $1,829 at that time. The trend paused in early February but continued back on track after a few weeks. It is also worth noting that, even during this interruption, gold was worth six times the world’s largest banks.

Gold price prediction

In terms of long-term forecasts, the finance, commodities, and cryptocurrency price prediction platform CoinPriceForecast, which relies on artificial intelligence (AI) to deliver its projections, has set the price of gold at $2,105 by mid-2023, as well as at $2,169 by the end of the year, or 6% higher than at press time, predicting further increases in the years to come.

Gold 2023 price target. Source: CoinPriceForecast

Meanwhile, Robert Kiyosaki, a renowned investor and author of the best-selling personal finance book ‘Rich Dad Poor Dad,’ is a strong supporter of investing in gold, arguing he would buy even more of it even if it crashed to $1,000, in his response to the projections of gold crashing made by financial advisor Steven Van Metre.

Elsewhere, Kiyosaki has also stated that he preferred silver, as well as assets like Bitcoin (BTC) and Wagyu beef as alternatives to stocks, exchange-traded funds (ETFs), and fiat money – particularly the US dollar – which he has referred to as ‘toilet paper’ and ‘fake money’ on multiple occasions.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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