Bloomberg: Gold prices will not stop rising once the $ 2,000 an ounce is broken

Bloomberg: Gold prices will not stop rising once the $ 2,000 an ounce is broken

Gold prices continue to rise unabated without the precious metal showing any sign of slowing, with strong support from the falling dollar, which puts gold on the right path to achieve the greatest gains in its history and reach historical values.

Spot gold was trading at the highest price of $ 1944.71 on Monday, surpassing the previous record of more than $ 20.

According to Bloomberg, the rise of the yellow metal came as the US currency fell to its lowest level in more than a year, the latest in a long series of bullish factors - including negative real rates in the US and bets that the Federal Reserve will maintain its policy when it meets this week - This will push prices to their highest levels.

Investors will closely monitor the Fed’s decisions this week. From December 2008 to June 2011, the Federal Reserve bought $ 2.3 trillion in debt and kept borrowing costs close to zero in an attempt to support growth, helping gold prices reach a record high since September 2011 .

With the world facing a long period of unprecedented economic and political turmoil, gold is now close to reaching $ 2000 an ounce, with expectations to continue to rise if the $ 2,000 an ounce barrier is breached.

Emerging signs of a record gold rally began to emerge in mid-2019, when the Federal Reserve signaled a willingness to cut interest rates as uncertainty - primarily due to the trade war between the United States and China - clouded its outlook.

The pace of the rise of gold increased in early 2020 with the increase in geopolitical tensions, before the outbreak of the Corona Virus Covid 19 exacerbated the situation around the world, prompting governments and central banks to launch massive amounts of stimulus packages to the economy, and send real interest rates to further decline in the region Negativity.


Gavin Wint, chief resource analyst at MineLife Pty said: “Strong gains are inevitable as we enter a period very similar to the post-global financial environment, as gold prices rose to record levels as a result of massive amounts of Federal Reserve funds being pumped into the system. Financial. ”

A weak dollar and real negative interest rates, when inflation is taken into account, provide additional momentum, and Gavin Wint said that gold may continue to rise above $ 2000 an ounce in the coming weeks.

Demand for investment in the precious metal has been uncompromising, as holdings of funds traded on the gold-backed exchange have surpassed their highest levels ever almost every month since late last year, and flows this year exceeded the annual total record set in 2009.

Gold attracted investors even as stocks rose - except for the sharp sell-offs last March as traders liquidated bullion holdings to cover losses in other markets - and US bonds were the main gauge to watch. The yellow metal is an attractive hedging instrument, at a time when US Treasury yields are falling below zero.

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