It seems that gold is beginning to attract the attention of large corporations who are looking for ways to preserve their wealth in the face of the impending threat of inflation. Last week, Palantir Technologies Inc announced that it had purchased $ 50.7 million worth of 100-ounce gold bars in August.
The transition to gold was caused by concerns about inflation as the company's money supply is growing due to the sale of its shares.
This is the second major company that considers gold as a safe haven asset. Tesla was the first to make a step in the field of alternative assets. At the beginning of the year, the electric car company announced that it had bought $ 1.5 billion worth of bitcoins. However, the company also stated that it considers gold as a currency hedge.
For many analysts, such steps towards gold are just the beginning.
Unfortunately, Palantir's entry into the gold market had little impact on prices, as gold could not break through the resistance level of $ 1800 per ounce. Some analysts warn that if gold cannot break through this level, it may eventually be able to retest the lows of the week before last, namely below $ 1,700 per ounce.
The reality is that hedge funds are moving away from gold because of their assumption that the US Central Bank is on the verge of changing its monetary policy. Expectations are growing that Federal Reserve Chairman Jerome Powell will outline the Central Bank's plan to reduce the monthly bond-buying program this week.
Even if that's not the case, Kevin Flanagan, Head of Fixed Income Strategy at WisdomTree, said that a phasing out is approaching and bond yields are expected to rise. This is not the best prospect for gold.
Despite the fact that the near-term for gold's growth may not be ideal, many analysts note that its long-term fundamentals are still optimistic. And although the Fed is trying to tighten its monetary policy, many economists see a limit to how low rates are now, and how high they will surge in the future.
Analysts at Metals Focus recently said in their report that they are still expecting the precious metal to rise to $ 1,900 an ounce.