Gold price hitting over $2,000 an ounce, helped by aggressive monetary easing

Source: Global Times Published: 2020/8/5 17:43:40


The gold price continued to surge Wednesday after hitting a record $2,000 an ounce Tuesday, as investors seek for safe-haven assets amid the coronavirus pandemic and US-China tensions, experts said.

The gold price hit $ 2,050.54 per ounce at 4 pm Wednesday (Beijing time) during New York's trading session, after it hit the major milestone of $2,000 per ounce Monday.

The rally was supported by a weak US dollar, low interest rates and monetary easing by central banks, to fight coronavirus-induced economic slowdowns, according to analysts.

"A weakening dollar could be the direct cause of the hike in the gold price. The global economic recession caused by the pandemic led investors to choose gold as a safe-haven asset to avert risks," Liu Xuezhi, a macroeconomics expert at the Bank of Communications, told the Global Times Wednesday.

He predicted the gold price is likely to sustain its upward momentum in the short term due to the uncertainties of the pandemic.

"The gold price will stop increasing only when the pandemic is largely put control and central banks reverse their aggressive easing policies," he said.

The precious metal has rallied more than 30 percent this year. Agencies have forecast that the gold price will continue to surge, with Goldman Sachs expecting prices to reach $2,300 per ounce in the next 12 months, according to a July report from Reuters.

RBC Capital Markets also lifted its gold forecast to $3,060 per ounce by next March.

On Monday, worldwide holdings in gold-backed exchange-traded funds surged to 3,365 tons, up 30.5 percent this year and now second only to the US government's reserves, Bloomberg reported Tuesday.


blog comments powered by Disqus