Gold price hits new high
The spot gold price roared to an all-time record above US$1,900 an ounce early Monday on Comex. Silver hit a seven-year high, as the dollar tumbled to a 19-month low. Gold reached US$1,946.90 an ounce, taking out the record of US$1,921.17 an ounce for spot bullion set back in 2011.
Not to be left out of the precious metal bull market, spot palladium gained 11% last week to US $2,284.90 an ounce after advancing 2.6% Friday July 24. Spot platinum rallied 8.9% last week to US$925.10 an ounce, although it fell 0.6% on Friday.
The dollar dropped to near a two-year low as US federal “money printing” continued in the form of stimulus measures, a usual bullish factor for higher precious metal prices. Other bullish factors driving higher precious metal prices are various uncertainties generated by the Covid-19 pandemic and its effect on the economy as well as the deteriorating relationship between China and the United States and the ongoing violence, riots and political unrest related to the Black Lives Matter protests in a number of US cities.
All of the above reasons plus ultra-low interest rates have got investors turning to precious metals and their related equities as a safe haven.
“With the current interest rates and negative yielding bonds, the upcoming election, our relationship with China and COVID-19, I do not see gold’s momentum slowing down. How far can it go? That’s difficult to say – but it will definitely continue. Needless to say, it’s a great time to own the yellow metal and silver,” said Terry Hanlon, President of Dallas-based Dillon Gage, a leader in precious metals trading and refining.
Gold analysts are now forecasting the yellow metal is on its way to US$2,000 an ounce.
The rise in the prices of precious metals is reflected in the bullish performance in the precious metals-heavy TSX Venture Exchange Index which has risen from a low of 330.65 in mid-March when the Covid-19 pandemic hit to the July 27 Index of 711.21.