Investing.com – Gold prices may be poised to hit record highs amid growing concerns about the health of the global economy, which is spurring gold above $ 1,800 an ounce.
The moves extended for a sixth day, with HIV infections rising in multiple parts of the world, amid fears that the economy would drag it down. The demand for safe haven has risen, with strong investment flows for ETFs this year, which in 6 months outperformed the 12-month figures recorded a decade ago, and some market watchers expect prices to reach record levels as the health crisis persists worldwide.
Governments and central banks from around the world have begun to pump a lot of cash into markets and the economy, with the aim of protecting it from collapse and pushing economic growth upward. Interest rates remain close to zero or below, thus providing support for gold and increasing its attractiveness.
There is speculation in the current period about the market need for more, to push economic growth upward. Investors should prefer gold, stocks over bonds and cash, because of their negative returns, and by printing central banks for more cash, it will be worth less, according to Ray Dailow, founder of the world’s largest gold hedge fund.
And to push gold further, injury cases in the United States exceeded 3 million, making it a third of global injuries in the United States.
Fed Chair Loretta Master of Kelveland said data on the spread of the virus in the United States raises downward pressure on the economic recovery. Her counterpart, Rafael Boustek, had a similar view when he told reporters that the economy was backing off its desirable levels, and that may have been a motive for further measures either by central banks or financial authorities.
“Gold’s drivers of cohesion above $ 1,800 an ounce are very strong, especially with the weak US dollar, high Corona virus infections, and doubts from Fed leaders on the strength of the US economic recovery,” says Warren Patterson, head of commodity strategy from ING.
And gold rose in spot transactions towards 1,810 dollars this morning, and recorded on Wednesday its highest price since 2011, at 1,818.02 for Wednesday, and for the same period of the month, gold reached the price of 1,921.17 dollars an ounce. Gold ETFs settle at all-time highs.
“We might be seeing profit taking near previous record levels, which is causing some resistance, but in the current environment this does not seem strong enough to stop the advance of gold,” Patterson says.
From a technical reading of gold, warning signs of losing gold might give its impetus. Gold’s RSI reached above 70, a sign that the asset has been overbought and ready to drop.
“We think the question is when will we see a new gold record, and not whether or not we will see a new record,” says Hui Li of China Bank Overseas company.
Gold recorded a previous high of $ 1,900 an ounce, and it is now over the participants ’eyesight, and gold may try to reach $ 2,000 an ounce, if the United States is unable to control the disease.
As for other metals, they rose 0.4%, platinum settled, and rose 0.7%.