Gold hits record high after first surpassing $ 2,000 | Economic news

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Gold extended its rally – hitting a new high – after breaking above the $ 2,000 (£ 1,523) an ounce mark for the first time in history as investors seek a safe haven.

Against the turbulence of the world market caused by COVID-19[feminine[femininecrisis, bullion has gained more than a third in value so far this year and is one of the best performing assets of 2020.

Its appeal was further fueled by very low interest rates and widespread stimulus measures taken by global central banks to mitigate the economic shock of the coronavirus pandemic, sparking concerns about inflation and keeping bond yields historically low.

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Silver prices have also increased this year, even outperforming gold

After breaking above $ 2,000 for the first time, gold hit a new high of $ 2,041.33 (£ 1,553) an ounce on Wednesday.

Silver prices also surged, jumping 3.2% to $ 26.84 (£ 21.95), the highest since April 2013.

The precious metal, both a safe haven and widely used in industry, has now risen 50% this year, even outperforming gold.

With the coronavirus having now infected more than 18 million people worldwide and the outlook for the global economy remaining uncertain, many analysts believe gold will rally more, with Bank of America predicting it could reach $ 3,000 ( £ 2,283) over the next 18 months.

Independent analyst Ross Norman said, “There is a level of fear in the markets that is almost palpable.

“The momentum is feeding on itself, based on genuine concerns about the inability of the macroeconomics to show significant signs of recovery. ”

Edward Moya, senior market analyst at brokerage OANDA, said: “The treasury market is a clear indication that this lower interest rate environment is here to stay.

“Over the past decade, Treasuries have always had an advantage over gold, but for now, they haven’t, we’re going to see investors focus primarily on gold. ”

However, Carsten Menke, analyst at Julius Baer, ​​warned that the rally remains vulnerable to setbacks.

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He said: “It is clear to us that the assurance that gold provides to an investor’s portfolio has become very expensive and that the market at current levels is suitable for short term traders rather than safe haven seekers. “.

Technical analysts are also warning that gold needs a period of consolidation.

Elsewhere, platinum and palladium – a rare metal used in industry as well as dentistry and jewelry – have also seen increases.

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