Tags: gold | record | haven | virus

Gold Could Hit New Record in Hunt for Haven From Virus

Gold Could Hit New Record in Hunt for Haven From Virus
(Dreamstime.com)
 

By    |   Friday, 10 April 2020 02:01 PM EDT

Gold prices are poised to soar to new record highs amid the economic uncertainty of when the coronavirus pandemic will subside, experts say.

Gold futures hit intraday high of $1,754.50 on April 9—the highest intraday mark since November 2012, Barron’s said.

Year to date as of April 9, however, gold is up more than 15%, versus a more than 14% decline in the S&P 500.

“Gold is breaking out into new all-time highs against most currencies except the U.S. dollar, which is the strongest fiat currency left,” Jeb Handwerger, editor of Gold Stock Trades, told Barron’’s.

After settling at $1,752.80 on April 9, prices now trade at about $171 an ounce away from the all-time intraday high of $1,923.70 on Sept. 6, 2011.

“A hold above $1,700 would be very constructive in terms of giving [gold] a boost up to the all-time highs,” but it will “take time” for the metal to reach those levels, says Adam Koos, president of Libertas Wealth Management Group.

“If the aftershock of the Covid-19 virus is a much deeper, wider iceberg under the surface of the economy, then I think we could see an acceleration in buying pressure” on gold, he says.

Peter Grosskopf, chief executive of asset manager Sprott, however, believes prices may surge beyond a record. “We are close followers of trading and flows in the bullion markets, as well as the underlying technical analysis, most of which point to gold over $2,000 sometime late this year or early next,” he says.

“There is too much debt at all levels. We have borrowed from the future, and there is not enough economy to pay it down. That equation requires much more financial repression going forward, and gold is a great hiding place from that process,” he says.

“It is a great time to buy gold equities which were sold off with general equities in the rush to meet margin calls” last month, says Grosskopf. “Their margins will be at record levels going forward.”

Data showed the number of Americans seeking unemployment benefits in the last three weeks has blown past 15 million, with weekly new claims topping 6 million for the second straight time last week as the pandemic has abruptly grounded the country to halt, Reuters reported.

More than 1.47 million people have been reported infected by the new coronavirus globally and 87,760 have died.

"The economic impact of the pandemic is likely in any case to preoccupy markets for a very long time to come, even once the pandemic has eased," Commerzbank analysts said in a note.

"Gold is likely to profit from the unprecedented glut of central bank money and new debt."

Holdings of gold by ETFs rose in March to a record high of 3,185 tonnes, worth $165 billion, the World Gold Council said on Wednesday.

Major physical bullion hubs saw activity dwindle this week due to coronavirus-led restrictions, with strained supply chains cut off from soaring safe-haven demand in some regions.

Most markets will be closed for Good Friday on April 10. 

© 2024 Newsmax Finance. All rights reserved.


Markets
Gold prices are poised to soar to new record highs amid the economic uncertainty of when the coronavirus pandemic will subside, experts say.
gold, record, haven, virus
505
2020-01-10
Friday, 10 April 2020 02:01 PM
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