Gold price rises above $2,000 for the first time

The price of gold has been rising steadily this year as uncertainty increases and economies worldwide continue to suffer the effects of the COVID-19 crisis

Gold prices have hit above a nominal $2,000 an ounce for the first time. Investors have moved cash into the precious metal as COVID-19 cases rise in the United States and more money is pumped into the global economy.

The record high gold price has also been driven by concern over tensions between the US and China. Prices of other precious metals, including silver, have also risen sharply since the start of this year.

The price of gold has increased by more than 30% this year as coronavirus cases continue to rise in America, causing dozens of states to halt or reverse their plans to reopen.

The rapid rise in cases, which has dented hopes of a swift US economic recovery, has also helped to drive up the price of silver by roughly one-third this year.

Among the reasons for these rises is investors preparing themselves for a possible pick-up in inflation because of the impact of trillions of dollars of stimulus from governments and central banks around the world.

Some investors see the fallout from the COVID-19 crisis, along with ongoing tensions between the US and China, continuing to push up the price of gold.

The market strategist Margaret Yang says she sees potential for bullion to continue rising in the coming weeks and months: “The mid-to-long-term prospect of gold and other precious metals remains bullish against the backdrop of a low-interest-rate environment and fiscal and monetary stimulus.

More great expectations?

Peter McGuire from said he sees gold reaching “$2,200 by Christmas”, with silver, platinum and palladium also set to see strong gains.

Overall, global consumption is expected to rise in 2020 owing to exchange traded funds (ETFs). Inflows in ETFs backed by gold reached a record high in April this year.

Spot gold prices are up by 12% this year on the London Metal Exchange (LME).

According to a recent Bank of America Corporation (BofA) report, The Fed can’t print gold, the price of gold will hit US$3,000 in 18 months. This estimate is 56% higher than gold’s historic record in September 2011 when the price peaked at US$1,921.

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