The price of gold hit a new all-time high this week on growing investor appetite for safe-haven assets. Experts project the epic run to continue, with gold to pass new milestone highs.
The commodity’s price surged to over $1,940 per ounce on Monday (surpassing a peak touched in September 2011) amid worries over the Covid-19 pandemic and tensions between the United States and China. It was trading at $1,954.30 as of 12:50pm GMT on Tuesday.
“What is really significant is how quickly it went through that $1,923, which was the previous high. The other thing which was … very, very important was the fact that it went through $1,800, and with similar ease,” said Barry Dawes, executive chairman at Martin Place Securities. “That’s basically saying to me that this is a very, very strong market,” he told CNBC.
“I’m looking for $3,500 within two years,” Dawes continued, adding that some consolidation is “probable,” but the underlying strength of the rally is “very significant.”
According to the executive, a lot of gold has been absorbed by Asia and the Middle East, which has left the West “at the margin, underweight.”
“The West has to rebuild its position and the only way they’re going to do that is really by pushing the price higher,” he said.
Dawes added that there are many issues that drive price moves in the precious metal, including currencies and coronavirus stimulus packages. “At the end of the day, it’s just going to be a very tight market, and particularly with the central banks having bought more gold over the past few years.”
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