With so many going on with the world, like the pandemic that is yet to be defeated, as news of further increase of positive cases continue, and the tensions between Washington and Beijing add up to concerns, investors are now hurrying to safeguard their money.
On Monday, prices for gold have climbed to a record high of $1,943.927 an ounce, which is almost 2 percent higher than previous trading. It had topped its last all-time high in 2011 of $1,921 per ounce.
Silver also rose prices, garnering a six percent increase to peak at $24.21 per ounce. It had also beat its record from last week which was the highest in seven years.
AxiCorp chief global markets strategist Stephen Innes reckoned that “Gold is the clear beneficiary of safe haven demand.”
UBS analysts also projected that prices for gold to skyrocket to $2,000 an ounce in 2020, which is furthered by several factors like the strain between the relationship of US and China. According to UBS chief investment officer Mark Haefele, among the reasons for the increasing worth of gold is its relationship with dollar, telling clients: “While we think gold will continue to be supported by rising geopolitical tensions, in our view the primary drivers of the gold price are its negative correlation to real interest rates and the dollar. We think these three factors, in combination with limited supply growth as miners continue to restrain capital spending, will drive gold prices higher.”
80% increase is no joke!https://t.co/Mvpjgudfme
— RT (@RT_com) July 29, 2020
On the other hand, Vivek Dhar, a mining and energy commodities analyst at the Commonwealth Bank of Australia pointed out that the US 10-year real yields had contributed to the increasing gold prices. “The fall in US 10-year real yields is primarily being driven by an increase in US 10-year inflation expectations.”
Tensions between US and China furthered as consulates of each other in Houston and Chengdu were shut down. Meanwhile, with the increasing number of people contracting the virus, jobs are still a far reach for many. Their dependence on the unemployment benefit would help, however, the program is about to expire and is yet to be extended. This sets the country into a tightrope walk towards economic recovery.