Gold price may rise to 1800$ per ounce

The reaction of the gold and silver markets to another Fed hike to 4%, the highest since 2007, is very interesting. The long-term trend for a decrease in the price of gold in dollars, due to the fact that the U.S. currency is strengthening, is in danger of being broken. This is due to the fact that an extended period of high rates of the Fed may, instead of curbing inflation, which is now equal to 8.3%, lead to losses of U.S. corporations due to high debt burden and, consequently, cause a recession.

Cautious investors like to wait out crises in a defensive asset like gold. So if the metal's rising trend isn't broken, it might hit $1,800 an ounce, versus the current $1,600. Silver in this case, too, will grow historically even stronger than gold.

Artem Tuzov, Executive Director of the Capital Market Department at IK "IVA Partners