HONG KONG | The gold price reached on Monday a new record level, confirming its status as a safe haven in the face of the pandemic and the us-china tensions, and helped also by the depreciation of the dollar.
Gold has hit a high absolute 1 944,71 dollars per ounce on Monday shortly after 3 p.m. universal time, and was worth 1 934,09 dollars about 8: 30.
It largely erased its previous record in session of approximately 1 921 dollars per ounce, which was signed in September 2011.
The price of the yellow metal has appreciated more than 27 % since the beginning of this year.
At the time where the epidemic of coronavirus worsens in many countries, the investor pays lip service to this eternal safe haven in times of crisis.
The extensive monetary easing measures decided by the u.s. federal Reserve (Fed) pushed the dollar lower in recent months, further strengthening the attractiveness of gold.
The market of the precious metal is denominated in dollars, a lower u.s. currency makes it less expensive for buyers using other currencies.
To 2 000 dollars per ounce
Analysts predict that gold will soon surpass $ 2,000 per ounce, then the Fed could deliver on Wednesday of new exceptional measures after its monetary policy meeting.
The negotiations that are held between the White House and Congress on a new plan to support the american economy, as well as the outbreak of the coronavirus in the United States, which complicates the recovery of activity in the country, also draw currently the dollar lower.
Monday around 6: 45 p.m., the dollar fell to 105,38 yen, its lowest level since march in the face of the japanese currency, another safe haven prized by investors.
The greenback was also lower against the euro for nearly two years, a euro trading above 1,170 0 dollars.
High earnings of gold “are inevitable at the time when we are entering a period similar to the environment emerged after the global financial crisis (2008-2009), where the price of gold had reached record levels because of the amounts of money injected by the Fed into the financial system,” said Gavin Wendt, an analyst for MineLife.
“Gold is clearly the beneficiary of the demand for safe-haven assets”, while the yields of other investments “sting of the nose”, such as those of sovereign bonds under the effect of massive intervention by central banks, has also commented on Stephen Innes of AxiCorp in a note published Monday.
The uncertainties already heavy on the recovery of the world economy in the second half are grafted to fears of a new escalation of tensions between the two largest economies in the world, which weigh on the equity markets.
After that the United States has called for the closure of the consulate of China in Houston (southern Usa), considered by Washington as a “hub of espionage and theft of intellectual property”, Beijing responded by ordering the closure of the diplomatic mission in the u.s. to Chengdu, in the south-west of China.
China announced on Monday to have “taken possession” of the us consulate in Chengdu.
The shares of mining groups the chinese Zijin Mining Group and Shandong Gold Mining were soaring in Trading Monday, in the wake of the surge in the price of gold.