Gold prices soar to record highs as coronavirus fears and simmering US-China trade tensions send investors clamouring for safety
Gold prices soared to record highs as coronavirus fears and simmering US-China trade tensions sent investors clamouring for safety.
Prices tore past the 2011 peak of $1,921 per ounce – reaching as high as $1,939.63.
Gold has risen by around 28 per cent so far this year as the pandemic sent stock markets into turmoil.
Shining light: Prices have spiked recently as governments have unveiled multi-billion dollar stimulus plans and lowered interest rates
But prices have spiked recently as governments have unveiled multi-billion dollar stimulus plans and lowered interest rates.
This means that usually safe and reliable investments – such as government bonds – could yield almost no return and has sent investors flocking to gold, which is used as a store of value in tricky times.
The precious metal was also given a boost yesterday by the fall in the value of the US dollar, which was sagging at a two-year low against a basket of other currencies as the outbreak spiralled in a number of American states.
A weaker dollar makes buying gold cheaper for those paying in other currencies – meaning this is a prime moment for them to swoop in.
Many analysts think gold will smash through the $2,000 mark within months. And super-bullish forecasters at Bank of America believe it could hit $3,000 by the end of next year.
Gold is seen as a safe space for jittery investors to park their cash because any escalation in the pandemic or a second wave in China or Europe could push the global economy even closer to the brink. Last week’s tit-for-tat missives between the US and China to shut outposts in one another’s countries only added to the strain on markets.
SP Angel brokers said: ‘Gold will continue to feed off the extent of the spread of coronavirus and the disruption it causes to the US and other economies.’