Posted on: 14. Juli 2020 Posted by: admin Comments: 0

The price of gold is trading at 8-year highs. Why is that?

In the last financial crises, gold has been one of the active refuges par excellence, in this one of the Coronavirus, it doesn’t seem to be the exception. How far can the price of gold go?

At the time of writing, gold is trading at US$ 1,771, after touching US$ 1,779 a few days ago, the highest value in the last eight years.

Gold futures quoted on the Comex market for August delivery rose 0.1% to settle at $1,781.20 per ounce at 1:31 pm in New York, according to Yahoo Finance.

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Gold price trend
Gold futures are heading for their best quarter in four years, after confirmed cases of COVID-19 exceeded 10 million worldwide, and the spread of the disease accelerated in the United States, Brazil and India.

While massive central bank stimulus has supported risk appetite and growth prospects, new outbreaks of COVID-19 around the world indicate that the pandemic is far from over, helping the prospects for safe-haven assets such as gold.

Gold has gained about 17% this year, driven by the health crisis, which caused a sustained flight to safe havens, amid unlimited quantitative easing led by the Fed.

Investors also continue to accumulate in gold-backed exchange-traded funds, which increased their holdings by 5.6 tons on Friday to a record, according to initial data collected by Bloomberg.

There is no doubt that all analyses point to an upward trend in the price of gold.

Predicting the future of gold

Citigroup Inc. raised its three-month spot price forecast to $1,825, maintaining its „upward bias to 2021.

Some other sources consulted are more optimistic and predict that the price of the precious metal can pass the $2,000 barrier this year without major drawbacks.