The price of gold reached a new record level on Monday, confirming its status as a safe haven in the face of the pandemic and Sino-American tensions, and also helped by the depreciation of the dollar.
Gold hit an all-time high of $ 1,944.71 an ounce on Monday shortly after 3:00 GMT, and was hovering around $ 1,933 around 5:30 GMT.
It thus largely erased its previous record in session of some 1,921 dollars an ounce, signed in September 2011.
The price of the yellow metal has appreciated by more than 27% since the start of this year.
As the coronavirus epidemic worsens in many countries, investors are praising this eternal safe haven in times of crisis.
The broad monetary easing measures decided by the US Federal Reserve (Fed) have pushed the dollar lower in recent months, further strengthening the attractiveness of gold.
Since the precious metal market is denominated in dollars, a decline in the US dollar makes it less expensive for buyers using other currencies.
– Around 2,000 dollars an ounce –
Analysts predict that gold will soon exceed $ 2,000 an ounce, while the Fed may deliver new exceptional measures on Wednesday following its monetary policy meeting.
The negotiations which are slipping between the White House and Congress on a new plan to support the American economy, as well as the outbreak of the coronavirus in the United States, which complicates the resumption of activity in the country, are also currently driving the dollar on the decline.
On Monday around 5:20 am GMT, the dollar was worth 105.60 yen, its lowest level since March against the Japanese currency, another safe haven popular with investors.
The greenback was also at its lowest against the euro in nearly two years, with one euro trading for around $ 1.1700.
High gold gains “are inevitable as we enter a period similar to the environment that emerged after the global financial crisis (2008-2009, Editor’s note), when gold prices had reached record levels because of the amount of money the Fed is pumping into the financial system, ”said Gavin Wendt, analyst at MineLife.
“Gold is clearly the beneficiary of the demand for safe havens”, while the returns of other investments “are nosy”, such as those of sovereign bonds under the effect of massive interventions by central banks, also commented Stephen AxiCorp’s Innes in a note posted Monday.
To the already heavy uncertainties about the recovery of the world economy in the second half of the year are added fears of a further escalation of tensions between the two leading world economic powers, which weigh on the equity markets.
After the United States demanded the closure of the Chinese consulate in Houston (southern United States), considered by Washington as a “hub of espionage and theft of intellectual property”, Beijing responded by ordering the closure of the US diplomatic mission in Chengdu, southwest China.
China announced Monday that it had “taken possession” of the US consulate in Chengdu.
Some experts go so far as to predict a price of $ 3,000 per ounce of gold futures, convincing many investors that it is not too late to jump on the bandwagon.
Shares of Chinese mining groups like Zijin Mining Group and Shandong Gold Mining soared on the stock market on Monday, in the wake of soaring gold prices.