Record gold prices 'could go higher'
Gold has soared through a record price this month and there are predictions it could go even higher over the next year as the effect of Covid-19 is felt around the world.
Wednesday, August 12th 2020, 5:00AM 
1 Comment
The price of gold went past US$2,000 (NZ$3,009) an ounce for the first time earlier this month and is up more than 30% this year, although it had slipped to US$1,987 by Tuesday evening.
Gold is often used as a safe harbour during times of disruption and as a hedge against inflation.
Chris Smith, general manager at CMC Markets, said both gold and silver prices were “due for a breather” because technical indicators had become stretched after nine weeks of gains.
“Gold started the year at $1,500 and momentum move and demand from investors has pushed it past the prior 2011 peak.”
He said unprecedented monetary and fiscal stimulus had boosted inflation expectations and created a “perfect scenario” for precious metals. Recent weakness in the US dollar had also pushed the price up. The drop in gold prices this week had been prompted in part by a reversal in that trend.
“As real rates move into negative territory it supports gold,” Smith said.
“Even Google issued a 10-year bond at 0.45% last week.”
But he said some forecasters were expecting further strength ahead and there were predictions it could top US$2,300 within the next 12 months.
| « Financial advice makes NZers better off | Mann on a mission to diversify financial advice » |
Special Offers
Comments from our readers
Sign In to add your comment
|
|
Printable version |
|
Email to a friend |
