Though the price of gold rose 3% in October, investors are not jumping into the safe haven just yet, according to St. Galler Kantonalbank CIO Thomas Stucki.
In an outlook Stucki noted that the gold price remains 10% below its value in the spring, even with recent volatility. Last month investors purchased a net 40 tons of the precious metal, something he called 'not an extraordinary move.'
He explained that a lack of recession indicators and rising US interest rates can partly be to blame for investor's hesitancy to go for gold.
It reads: 'The devaluation of nominal assets by high inflation does not need to be feared. Although the world is full of trouble spots, a major global crisis such as the 2008 financial crisis is not evident.
'And last, interest rates in the US are rising. This strengthens the dollar, and a strong dollar is poison for the yellow metal.'
Stucki also notes that just as these factors have impacted gold now, he believes they will continue to do so in the coming months as gold hovers around CHF 1200 to CHF 1300 per ounce.