Prices of gold skyrocketed to $40 on opening bell Monday to hit a new record high of $2,320 an ounce on the heels of investor worries regarding weak returns on bank deposits.
Gold's stellar ascent also has something to do with the simmering trade drama between the United States and China.
Gold futures for December delivery were up 1.8 percent to $1,537.61 an ounce. This signified its highest price since April of 2013. Spot gold likewise rallied almost 10 percent to 1,525.50 per ounce. Year to date, the precious metal has climbed almost 19 percent, beating Wall Street's benchmark S&P 500 Index rally of a 13.7 percent.
As investors look elsewhere to safeguard their assets other than unstable equities and low-interest accounts, demand for gold from domestic retailers has peaked in the last few months, John Feney, business development manager at ABC Bullion, said.
Feney said that interest for the yellow metal has been on the rise, though 90 percent are on the buy-side. "Buying volumes are 2 to 3 times bigger than normal as investors seek exposure to gold," he said. The company's global manager, Nick Frapell, agrees that prices of gold will continue to increase.
Gold rose to over 1,500 an ounce for the first time this month since April of 2013 on worries of global market disruption as well as speculations of an additional decrease in rates. The lower the interest goes, the lesser will be the chance of holding non-performing gold bars, making the yellow metal more appealing to buyers owning other currencies.
Silver, on the other hand, also had solid gains and reached a 2-year peak. Geopolitics is on the main menu of the economy this week, which helps give more value to these safe-haven metals. Gold and silver's technical positions are also fully upbeat, which continues to lure in chart-based investors. September silver prices on the Comex last soared $0.208 at $17.63 per ounce.
Gold has been aggressively bid for a full year after it bottomed out around 1160 in September 2018. The topside shift has had a few different triggers along its path, with the first push emerging from easing predictions around the US central bank and that lasted through the first half of the year.
Gold's buying pressure is projected to stay firm as investors keep their eye on these glittery commodities as a store of value and cushion against economic imbalance. At this point, analysts advise that it would be wise to invest in gold stocks with promising growth returns.
