The gold price finally broke through the elusive and phycological $1,800 mark, and so far today, buying interest has kept it above this critical level, and now some in the market have set their sights on the price hitting $2,000 in the not to distant future.
The precious metal has now climbed to its highest level in around nine years, as investors seek protection from the wild swings in the market, and the huge uncertainty caused by the coronavirus, and some say now, the stage has been set for the price to move higher as we enter the 2nd half of the year.
“Gold ETF investment demand shattered numerous records this year as investors sought safety from the economic turmoil created by COVID-19,” said Juan Carlos Artigas, head of research at the World Gold Council.
“Demand is likely to continue its strong momentum in the second half of the year as concerns over the economic impact of COVID-19 and infection rates of the virus linger” he added.
The current price of gold can be readily justified at face value due to the coronavirus and trade wars between China and the US among other things, but many believe a big part of the recent gains is that investors are hedging their bets.
The one thing that stands out at the moment, is that gold is rising alongside the stock market and the US dollar, which is unusual as the precious metal usually benefits when equities and the greenback are in retreat.
It means Investors may be currently holding positions in gold, to prepare themselves for a 2nd crash in the stock market, which might have some truth to it, considering that chances of a 2nd wave of the coronavirus is growing by the day if we pay attention to the rising number of cases in the US.
If these investors are in fact correct, we shouldn’t be surprised to see gold crack the $2,000 mark fairly soon.