In the last financial crises, gold has been one of the quintessential safe havens, in this case of the Coronavirus, it does not seem to be the exception. How far can the price of gold go?
At the time of writing, gold is trading at $ 1,771, after a few days ago it touched $ 1,779, the highest value in the last 8 years.
Gold futures listed on the Comex market for August delivery rose 0.1% to settle at $ 1,781.20 per ounce at 1:31 pm in New York, as reported by Yahoo Finance.
Gold price trend
Gold futures are heading for their best quarter in four years, after confirmed cases of COVID-19 exceeded 10 million worldwide, and the spread of the disease accelerated in the United States, Brazil and India.
While massive central bank stimulus has supported risk appetite and growth prospects, new outbreaks of COVID-19 around the world indicate that the pandemic is far from over, aiding refuge asset prospects like gold.
Gold has gained about 17% this year, fueled by the health crisis, which caused a sustained leak to active shelters, amid an unlimited quantitative easing led by the FED.
Investors also continue to accumulate in gold-backed exchange-traded funds, increasing their holdings by 5.6t on Friday to a record high, according to initial data compiled by Bloomberg.
There is no doubt that all analyzes point to an upward trend in the price of gold.
Gold future predictions
Citigroup Inc. raised its three-month spot price forecast to $ 1,825, maintaining its “bullish bias for 2021.”
Some other sources consulted are more optimistic and predict that the price of the precious metal can overcome the $ 2,000 barrier this year without major problems.
Bitcoin is digital gold?
Another alternative to gold is Bitcoin, which is gaining more and more popularity among investors. One of its main advantages is that it can be stored digitally, and it is scarce as gold, since only 21 million BTC will be issued, not one more, not one less.
At the time of publication, the price of Bitcoin is located at US $ 9,200, with a yield of over 30% so far in 2020.
If we take the last 3 months, the yield of Bitcoin is 42%, while that of gold is only 7%, as can be seen in the graph below.
Macro data to consider
In the next 3 days, high impact macro data will be released, which will surely move gold and the rest of the financial markets.
- Tuesday 06/30: To end the month, FED President Jerome Powell and US Treasury Secretary Steven Mnuchin are scheduled to testify before the House Financial Services Committee.
- Thursday 07/02: Long-awaited US employment data, expected to be positive, will be released. The unemployment rate is estimated to drop to 12.4%, from the current 13.3%.
The information in this content has been extracted from reliable sources detailed below:
1- Own writing of the author of the content.
2- External source: Yahoo Finance.