The price of gold is trading at US$ 1,843, approaching its historical high of US$ 1,923, recorded back in August 2011. As the Coronavirus pandemic rages across the Americas, coupled with outbreaks in Bitcoin Up Europe, investors are turning to gold.
Today, Bloomberg news agency reported that precious metals are rising to multi-year highs due to lingering concerns about the coronavirus and the prospects for greater economic stimulus around the world.
In today’s reflection we ask ourselves: Is gold the investment with the most future in the short/medium term?
Does gold get more press than Bitcoin?
The price of Gold is flying
Gold futures rose to a nine-year high and silver peaked in 2014 after Hong Kong reported additional cases of the virus and new infections in the Australian state of Victoria increased, fuelling demand for refuge assets.
European Union leaders agreed on an unprecedented stimulus package to pull their economies out of a virus-induced recession. Silver, used in manufactured products ranging from solar panels to electronics, is getting an extra boost from supply concerns and is betting on a rebound in industrial demand.
The two metals are the best performers in the Bloomberg commodity index this year, as investors clamor for insurance against further economic consequences of the virus.
Low interest rates amid easy monetary policies have also reinforced the attractiveness of non-interest bearing assets. The jump in demand has driven positions in metal-backed exchange-traded funds to record highs.
„For gold it’s the same old story: real rates are still falling and we are reaching levels close to the global financial crisis,“ Daniel Ghali, TD Securities‘ commodities strategist, said by phone.
„We’ve seen silver increasingly marketed as an industrial metal. We believe the marginal unit of demand for silver is coming from the industrial metal side.
Gold futures for August delivery rose 1.5% to reach $1,843.90 an ounce at 1:30 pm at the Comex in New York, the highest closing price for a more active contract since September 2011. Gold futures are less than $100 from their all-time high.
Silver for September delivery rose 6.8% to $21,557, the highest since March 2014. Other precious metals also advanced on Tuesday, with palladium futures gaining 3.7% on the New York Mercantile Exchange and platinum up 7.1%, the most since April.
Everything seems to indicate that gold will continue its upward climb, at least as long as the Coronavirus pandemic remains latent.
I bid you farewell until tomorrow with this quote from Benjamin Franklin:
„The path to wealth depends fundamentally on two words: work and savings.“