Predicted increase in gold prices - set to double in Euros by the year 2022.
The upcoming constitutional referendum in Italy is a political event, not an economic one, and it is not expected to significantly impact the price level of gold. This domestic Italian issue is unrelated to monetary policy or interest rates, as some may believe.
However, the referendum's outcome could potentially cause turmoil on capital markets, but its impact on gold prices remains uncertain. Robert Hartmann, a prominent analyst, has not provided specific predictions about the referendum's influence on the gold market.
In the broader context, the relationship between rising interest rates and falling gold prices is generally inverse. This occurs because gold does not yield interest or dividends, making higher interest rates more attractive compared to interest-bearing assets like bonds.
Recent years have shown that persistent inflation and economic uncertainty can sustain or elevate gold prices even amidst rate hikes. For instance, gold prices have surged about 40% year-over-year to around $3,300 per ounce as of August 2025, supported by inflation concerns and the Federal Reserve's decision to hold rates stable until mid-September 2025.
Looking ahead, if the Federal Reserve cuts interest rates as anticipated in the near term, gold prices are likely to remain supported or rise, continuing the recent upward trajectory. However, if inflation subsides significantly and interest rates increase again or remain elevated for longer, gold could face downward pressure, consistent with historical patterns.
Robert Hartmann, a well-respected analyst in the gold market, offers some insights. He states that the bottom of the gold price should now be in sight. He also notes that the greatest increases in the gold price have coincided with rising interest rates and higher inflation rates.
In addition, Hartmann suggests that the relatively low price level of gold should attract more buyers. He also recommends buying more gold on weak days. Interestingly, he attributes the recent gold price correction to speculation about a departure from ultra-loose monetary policy.
In summary, while rising interest rates have historically been associated with falling gold prices due to increased opportunity costs, recent years show that persistent inflation and economic uncertainty can sustain or elevate gold prices even amidst rate hikes. For the coming months, expected interest rate cuts may support higher gold prices, but long-term movements will depend on the interplay between inflation trends, Fed policy, and global economic risks.
[1] Federal Reserve's Role in Gold Prices: An In-depth Analysis [2] Gold Prices Soar Amidst Inflation Concerns and Stable Interest Rates [3] Central Bank Gold Purchasing: A New Trend in Portfolio Diversification [4] The Impact of Interest Rates on Gold Prices: A Historical Perspective [5] Gold as an Inflation Hedge: Lessons from the 1970s Stagflation
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