Fear of a new global outbreak triggers gold to 2012 highs
Coronavirus outbreaks in Beijing and Germany, and the advance of the pandemic along the West Coast of the United States, has kept gold prices soaring. The precious metal is the quintessential safe-haven asset: the fear of renewed economic closures due to a new global outbreak of the pandemic has pushed its price to its highest level since 2012.
Gold prices have climbed 15% so far this year, and Goldman Sachs believes it will hit $2,000 an ounce if the uncertainty continues, and investors continue to abandon equities to take positions in gold. If Goldman Sachs' forecast comes true, it would be a historical record. Gold's highest historical level is $1,921, from September 2011 during the worst of the last financial crisis.
Currently, as of June 22, 2020, the price of gold is around $ 1,750 per ounce, a high that it has not reached since November 2012.
Source: Admiral Markets MetaTrader 5. Gold weekly chart. Data range: from August 24, 2008, to June 22, 2020. Prepared on June 22, 2020, at 9 am. Please note that past performance does not guarantee future returns.
However, fear of a flare-up of the coronavirus pandemic isn't the only thing skyrocketing the price of gold. The deterioration in relations between China and the United States following the Hong Kong national security law announced by Chinese president Xi Jinping has investors on edge, beginning to doubt their hopes of an imminent and rapid economic recovery.
US President Donald Trump has threatened to sever relations with China, again raising the possibility of a new trade war between the two countries at a time of great uncertainty.
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