Gold’s price tops US$1,900 an ounce for the first time since 2011 in a race towards a record, in a rally driven by cheap money
- Gold is heading for a seventh weekly gain, the longest stretch since 2011, while silver is poised for its biggest weekly advance in about four decades
- Gold may reach the all-time high by early next week, traders say
Spot gold topped US$1,900 an ounce for the first time since 2011 and edged closer to an all-time high with flaring geopolitical tensions and concern over global growth driving demand for haven assets.
Increasing signs that the prolonged pandemic is stalling an economic recovery and the recent spat between China and the US are underpinning bullion’s appeal. The metal is also getting support from a confluence of low or negative real rates and a slipping dollar amid massive liquidity injections from governments and central banks worldwide. The weaker dollar and plunging yields on government bonds lower the opportunity cost of owning gold.
Gold is heading for a seventh weekly gain, the longest stretch since 2011, while silver is poised for its biggest weekly advance in about four decades. Gold may reach the all-time high by early next week, according to a trader at RJO Futures in Chicago.
“The pace of this thing is unbelievable,” Bob Haberkorn, a senior market strategist at RJO, said by phone. “People just want to buy, buy, buy, they just want to be in – they don’t want to miss it. People are preparing for more money printing, lower dollar in the future and hedging. And there’s no yield on Treasuries right now, so gold is a safe spot given the circumstances of the central banks and the coronavirus.”
Spot gold rose 0.7 per cent to US$1,900.19 an ounce by 1:46pm in New York. Prices are nearing the record US$1,921.17 reached in September 2011.
Comex gold futures for August delivery rose 0.4 per cent to settle at US$1897.50. Spot silver also advanced, bringing gains this week to more than 17 per cent, the most since 1980.