Top Stories This Week: Gold Price Recovers After Worst Month Since June 2021

After trending down in February, the gold price has started March on a more positive foot.

Midway through the first day of the new month, the yellow metal had already pushed past US$1,840 per ounce, although it soon fell back to the high US$1,830s. At the time of this writing on Friday (March 3), it was back up at about US$1,846.

February was reportedly gold's worst month since June 2021, a milestone that most market watchers probably weren't hoping to see. Gold opened at US$1,928 on February 1 and ended at US$1,831 on February 28, recording a drop of about 5 percent.

The experts I've spoken to have talked extensively about the factors putting pressure on gold, but concerns about the US Federal Reserve's path forward are at the top of the list. Heading into 2023, many market watchers were expecting the central bank to pause its interest rate hikes sooner than later, or even reverse course. Instead, the Fed announced a 25 basis point rise at its last meeting, and commentary from Chair Jerome Powell and other officials indicates more increases are on the way.

Gold doesn't tend to fare well when rates are high, but it's also known as a hedge against inflation and uncertainty, both of which continue to run high. As a result, it's become complicated to understand where the precious metal will go next.

I recently had the chance to speak with Peter Grandich of Peter Grandich & Co., who shed some light on that question and shared the two main reasons he remains bullish on gold moving forward.

The first is that the paper market has shifted from the west to the east, which he said has eased the pressure from bears who try to take advantage of downside pressure. The second is "the unbelievable amount of purchasing done by central banks" — as a reminder, they bought 1,136 metric tons of the metal in 2022, the highest level ever.

"When central banks are big, big buyers, it's kind of like the old saying, 'Don't fight the Fed' — well, don't fight the central banks when it comes to gold," Peter quipped during the interview.

He also shared his thoughts on uranium and copper, as well as the junior sector and the looming retirement crisis he sees coming in the US. I definitely recommend checking out the full interview if you're interested in any of those topics.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.