Traders have flocked to the safe-haven asset in droves as the tumult of the coronavirus continues to spook investors.
Gold prices have been rising steadily in recent weeks, with the price of the precious metal sitting at $1,950.60 per ounce as of 6:59 a.m. EST, a 0.309 percent gain on the day. Traders have flocked to the safe-haven asset in droves as the tumult of the coronavirus continues to spook investors. The continuing tensions between the United States and China have also put traders on edge and has kept the popularity of gold from fading. Gold prices are up around 8 percent in July and have gained some 32 percent since the coronavirus pandemic began in March, and if the trend continues, the asset will see its fifth consecutive positive month for the first time in nearly ten years.
Just as many traders think that gold prices are nearing their peak, many others have forecasted that the price of gold could continue its upward trend, hitting as high as $3,500 per ounce before retreating. "I'm looking for $3,500 within two years," Barry Dawes, the executive chairman at Martin Place Securities told CNBS this week. He attributed his beliefs in part to the fact that gold rocketed through the previous high of $1,923, as well as the important $1,800 level.
Other analysts see a rise to around the $2,800 level based on technical indicators. One such analyst is Juerg Kiener of Swiss Asia Capital, who says that this level could be rapidly approaching. A recent weakness in the U.S. dollar may be contributing to the trend, as the U.S. government continues to print money in order to increase spending, a move which has lowered the value of the greenback.
Still, some analysts expect to see consolidation or even a decline in prices when gold hits the $2,000 mark which it is rapidly nearing. Carley Garner, author of "Higher Probability Commodity Trading," has suggested that the burst of the gold bubble is inevitable and that things will get "ugly" when this happens, perhaps seeing a decline all the way to the $1,300 level.
The U.S. dollar was trading lower on Wednesday, down 0.057 percent against the yen to 105.02. The greenback also eased against the British pound and the euro, with the sterling gaining 0.22 percent to $1.296, and the euro up 0.12 percent to $1.173. Both Republicans and Democrats seem to agree that U.S. citizens need another round of stimulus checks. Though the exact details of the funding has yet to be confirmed, a $1200 grant to families is expected, which will continue to flood the market with dollars and can contribute to a further devaluation of the greenback in the near term.