The appreciating dollar does not mean a fall in the price of gold in the Polish currency

The price of gold is falling and may continue to fall - forecasts the President of the Treasury Mint. Currently, the value of investment products produced in this metal depends to the greatest extent on the decision FED raising interest rates in the US and the strengthening dollar. However, it is for this reason that the de facto price of gold does not change if we take into account the Polish currency. Poles are still eager to invest their savings in gold, primarily because gold safely carries the value of money over time. Compared to other assets, it is definitely a long term investment. The Treasury Mint continues to observe a very high demand for gold.

Forecasts for the gold market

The ongoing geopolitical crisis and the outbreak of the war in Ukraine significantly contributed to the increased interest in investing in gold. In March this year, the ore broke the price threshold of two thousand per ounce [ed. 2 058,30 USD / ounce on March 08.03th]. The uncertainty caused by the Russian aggression against Ukraine has captured the imagination of investors wishing to secure themselves financially against various opportunities. 

- March's gold price peak stemmed from uncertainty. This was higher than that caused by the 19 Covid-2020 pandemic or the 2011 economic crisis. In recent weeks, however, we have seen a fall in gold prices and in my opinion there is still potential for a sell-off. This is, among other things, the effect of a strong dollar, and especially of the US FED's decision to fight inflation. So everyone is waiting for another interest rate hike in the US, and this means a strengthening of the dollar. This currency is currently in close correlation with gold's valuation, so the gold's price may continue to decline. However, in Poland you still have to pay over PLN 8000 for an ounce of gold, so the price expressed in Polish currency has not changed significantly. - is noticed by Jarosław Żołędowski, President of the Treasury Mint.

Please look at other indicators as well - inflation in Poland remains at 17%, and some analysts forecast that it will be even higher and will remain for many months. Bank deposits up to 7% mean a real investment loss. It is also becoming more and more difficult to buy a flat for rent, because developers are suspending new investments. Not everyone wants to buy stocks on the stock exchange, which is also facing hard times. And cryptocurrencies are an offer for investors who like emotions. In such an environment, gold remains a good investment - especially for those who invest in the long term. Investments in gold can start from just a few hundred zlotys. Lightweight products have been particularly popular since the outbreak of the war. Gold is easy to sell because it is a very liquid asset that is easily tradable around the world. In addition, the war in Ukraine continues to foster uncertainty on the financial markets. There is also another issue, gold has become very popular in Poland in the last 2-3 years.

The beginning of this year The Treasury Mint estimated that Poles bought about 14 tons of gold in 2021. 

- Our analyzes show that in 2022 Poles will buy even more gold than a year ago. According to information obtained from international mints - gold producers, Poland is in at least five, if not the top three, European Union countries in terms of gold sales. It is enough to look at the half-year report of the Mint of Treasury to see that the first half of the year was record-breaking when it comes to sales of this metal. In the first half of this year. The Treasury Mint sold as much as 2,4 tons of gold. We predict that the purchase of gold will continue to be very popular among investors in the near future. For how long? - Hard to say. The deepening energy crisis and galloping inflation, and thus - constantly rising prices of food and services, will certainly affect Poles' wallets. By allocating more funds to food, fees and other living costs, they will likely acquire fewer investment assets - Żołędowski notes. 

What gold do we buy most often?

The Treasury Mint in the first half In 2022, it sold 2,4 tons of gold, which is an increase of 141% y / y compared to the previous year. The most popular among buyers are still 100g and 1oz bars, as well as bullion coins, especially Canadian Maple Leaf and Australian Kangaroo. The company carried out several thousand gold sales transactions a month, both in its stationary network and online, it said. The Treasury Mint buys gold products valued in EURO from the largest associated producers  in LBMA (London Bullion Market Association), an organization that sets and supervises the highest standards on the market. The company cooperates with the following mints: Perth Mint (Australia), Heraeus (Germany), Agor-Heraeus (Switzerland), Münze Österreich (Austria), Rand Refinery (South Africa), PAMP Suisse (Switzerland), Royal Canadian Mint (Canada), Shanghai Mint (China), The Royal Mint (Great Britain), Umicore-Degussa (Germany), The United States Mint (USA), Valcambi Switzerland (Switzerland) and C. Hafner (Germany).