Gold reached a record high of more than $2,000 an ounce on Tuesday, as investors, spooked by a weakening dollar, volatility triggered by coronavirus and ever rising U.S. cases, continue to look for a safe haven to move their money into.
KEY FACTS
- Gold hit a high of $2,041.33 an ounce on Wednesday, after exceeding $2,000 for the first time on Tuesday.
- The precious metal has gained more than 34% this year, making it one of 2020’s best-performing assets, Reuters reports.
- Gold isn’t the only precious metal to have gained significantly, with the price of silver jumping to its highest level since 2013, and rising 50% overall this year.
- The dollar weakened to two-year lows last week as lawmakers in Washington work to agree another stimulus deal.
KEY BACKGROUND
Governments and central banks across the world are unleashing stimulus packages worth some $20 trillion into the global economy, according to the Bank of America, in a bid to boost output after the pandemic continues to halt major industries and force people to stay home. U.S. lawmakers are currently working to secure a further package of economic relief, and investors are concerned that stimulus packages will trigger inflation and devalue other assets. Meanwhile, escalating tensions between the world’s two largest economies, the U.S. and China, is likely to keep pushing gold upwards.
WHAT TO WATCH FOR
Gold’s impressive rally could well continue, analysts predict, as the pandemic shows little sign of slowing down, allowing battered industries to reopen and letting global economies recover. More than 18 million people have been infected so far, while the death toll topped 700,000 this week.
By Isabel Togoh, Forbes Staff