PieTrader

Gold has always been one of the most valuable and coveted metals in the world. Scarcity is the main reason for its value. Estimates of global mined gold reserves fluctuate slightly from year to year, but are not higher than 50,000 tons. The countries with the largest estimated reserves are Australia, Russia and the United States. Currently, China is the world's leading gold mining country, followed by Australia and Russia.

Supported by a weaker US currency and growing global concerns, gold rose around 1% to surpass $2,660 per ounce on Friday, marking the fourth consecutive session of gains. According to reports, Israel and Hezbollah accused one another of violating the truce a day after it went into force, and President Putin threatened to launch a nuclear-capable missile attack on Ukraine. However, as investors anticipated more US data for more clues about the Federal Reserve's monetary policy stance, the metal is expected to drop about 2% for the week. Investors are still expecting another Fed rate decrease in December after core PCE prices for October earlier this week met forecasts. Yet, other data pointed to a resilient economy, reinforcing expectations that the Fed will adopt a cautious approach next year. Over the month, gold is set to decline for the first time since June.

Among gold miners, America's Newmont is the global leader, with nearly six million ounces in production in 2020. Newmont's revenue is $11.5 billion in 2020. Barrick Gold's Canada and South Africa's AngloGold Ashanti are the largest companies, respectively the largest gold producers in the world. We are seeing inflationary pressures now around the world. When inflation occurs, the purchasing power of fiat currency tends to decrease. This leaves investors looking to channel their wealth into more limited assets such as real estate, art and gold. If this inflation is not temporary, then we could see gold outperform other assets over the next five years. Considering that inflation could last for more than a few years, we could see gold move from its current price of $1,930 to $2,300 over the next five years.