Gold soars to a seven-year high on WHO virus warning
Gold prices surged to a seven-year high at the start of July as the World Health Organization (WHO) warned that the worst of the coronavirus pandemic is still yet to come. Early in the Asia session, traders sent gold above the $1,780 level which is the highest level since November 2012. Other metals such as silver, platinum and palladium also moving higher.
As fears of a second wave of the coronavirus mount gold has recorded its best quarter since March 2016. Investors concerned have proven to be right in some cases as more and more countries report rising cases of Covid-19 infections.
In Texas, new cases soared by 4.5% which caused hospitals to close due to reaching full capacity. Australia reported its largest one-day spike in cases for more than two months, sounding alarm bells in a country that came out of their lockdown period first. South Korea is also dealing with an increase in coronavirus infections after relaxing social distancing measures in May.
However, it hasn't just been the fear of a second wave of the coronavirus that has caused investors to seek safe-haven assets such as gold. US-China tensions continue to escalate, especially now that China passed the Hong Kong security law. Trump has been threatening a new wave of tariffs on Europe and UK and EU Brexit negotiators have made little to no progress.
At the start of July, the price of gold was roughly 8% away from its all-time high price level of $1,921 made in September 2011.
Source: Admiral Markets MetaTrader 5, Gold, Monthly - Data range: from 1 January 1992 to 1 July 2020. Please note: Past performance is not a reliable indicator of future results.
In 2015, the value of Gold fell by 10.4%, in 2016 it increased by 8.1%, in 2017 it increased by 13.1%, in 2018, it fell by 1.6%, in 2019, it increased by 18.9%, meaning that after five years, it was up by 28%.
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