The weakness of the dollar is the cause of the rise in the gold price.
The gold price started the new year with strong price gains. On the first day of trading in 2021, the price of a troy ounce rose by around 1.5 percent to well over 1,900 US dollars per troy ounce (31.1 grams). The precious metal reached $ 1,928.35 on Monday morning on the London Stock Exchange, its highest level in almost two months.
On the market, the rising gold price was explained by the weakness of the dollar. The US currency has been under pressure against all major currencies in the past few trading days. The world reserve currency was less in demand due to the generally positive mood on the financial markets. Since gold is traded in dollars on the world market, a weak US currency makes the precious metal cheaper in countries outside the dollar area and thus strengthens demand.
After a weak November, the gold price rose by around seven percent in December. The gold price has been on an upward trend for two years. In 2019 and 2020, investors could look forward to price surcharges of around 20 percent each. Extremely low interest rates and an unprecedented flood of money from leading central banks in the fight against the economic consequences of the corona pandemic are generating demand. Most experts expect the gold upward trend to continue in 2021.
