The gold and silver markets are experiencing a period of sharp fluctuations, in light of the interplay of economic, monetary, and geopolitical factors, from expectations of US interest rates and inflation rates, to rising oil prices and escalating military tensions in the region. Between the waves of rise and decline, investors, especially small savers, find themselves facing questions about the direction of prices in the next stage, and whether the current decline is an indication of a change in course or a temporary correction in the precious metals market.
In this context, gold trader Bashir Hassoun explained, in an interview with “Lebanon Debate,” that the decline in gold and silver prices is linked to a group of overlapping factors, foremost of which is the talk about raising interest rates in the United States of America, and the rise in global inflation rates, especially in the United States, in conjunction with the rise in oil prices.
He added that the escalating geopolitical tensions in the region constitute an additional factor in the movement of markets, especially the targeting of vital installations and oil refineries in the Kingdom of Saudi Arabia, in addition to the American threats to launch broad strikes on Iran, and the accompanying questions about the nature of the latest strike, and whether it is preliminary, limited, or a precursor to additional repercussions and escalation.
Hassoun believed that the combination of these factors is putting pressure on gold and silver prices and pushing them downward, but he ruled out that this would constitute a reason for panic in the long term. He explained that it is possible that prices will witness a further decline in the short term, especially if the United States tends to raise interest rates next December or January, but he expects an improvement during the next six months or within a year.
Explaining this optimism, he pointed out that global central banks’ purchases of gold are increasing, along with investment funds’ tendency to buy, pointing out that small investors should monitor the behavior of the big players in the market, that is, countries, central banks, and investment funds.
He explained that, despite the current declines, they do not tend to sell out of fear, but rather continue to buy, considering that these indicators deserve to be taken into consideration by small investors before making their decisions.
Hence, Hassoun issued a call to citizens and savers not to fear the decline in gold prices and rush to sell it at a loss, and also not to panic over the sharp decline that silver witnessed. He pointed out that the price of silver recorded a decline of about $400 per kilogram during the current month, the second largest decline witnessed during the year, according to his estimate.
In response to a question about whether it is recommended to buy at this stage, he explained that the matter depends on the amount of money a person has available. If the amount is limited, such as an individual owning 100 or 500 dollars, it may be better to use it to buy gold instead of leaving the money aside, with the aim of preserving its purchasing value in light of the high prices and inflation that are putting pressure on savings in Lebanon and the world.
As for those with large sums of money, he advises not to pump the entire amount at once, but rather to divide the purchases in stages, in anticipation of the possibility of a continued decline. He gave an example of this: someone who owns $1,000 can buy gold for half the amount currently, and keep the other half to benefit from any additional decline in prices, allowing him to distribute the purchase risks and not enter with all the liquidity at one price level.
Regarding the future of gold, Hassoun stressed his belief that prices will recover in the long term and return to their upward path, considering that the basic factors that pushed gold to rise still exist.
He pointed out that the price of an ounce of gold reached levels of approximately $3,960 during the current year, which are high levels compared to what prices were in previous years, reviewing the path of the historical rise, as the ounce was at around $1,600 about four years ago, $1,900 three years ago, and $2,700 two years ago.
Hassoun concluded by pointing out that the recent decline, despite its severity, does not negate the fact that gold is still at historically high price levels compared to previous years, reiterating his call not to make hasty selling decisions under the influence of fear, and to deal with market fluctuations calmly, taking into account the size of the investment and the ability to bear risks.
