In more than six years, gold rose to its highest level, with Goldman Sachs claiming that the precious metal offered a more secure hedge in a volatile global economy than oil.
Gold reached $1,600 an ounce early Monday as it entered the year 2020 with a "good momentum," said Gavin Wendt, senior resource and market analyst at Sydney's MineLife Pty, in an email.
The precious metal is capitalizing on this largest yet projected climb since 2010, boosted by a weaker American currency, lower real property rates and the pressure on global growth brought by the China-US trade drama.
Although Goldman Sachs analysts noted that at this point there was a wide range of potential scenarios, the bank stressed that bullion could be a better bet than oil.
"History shows that gold is likely to rebound well beyond current levels in the majority of outcomes," analysts Jeffrey Currie and Damien Courvalin said in a note dated January 6.
Spot bullion soared to $1,588.13 an ounce, the highest level since April 2013, at $1,579.13. In Singapore, while the futures rose to $1,590.90 by as much as 2.5 percent. Palladium jumped 1.5 percent to $2,019.73 per ounce, a fresh record, while silver and platinum rose as well.
The precious metal is lifted by other factors and it is doubtful that the Federal Reserve will raise interest rates in the next six months at any time, which in turn would likely keep a limit on the U.S. dollar - both of which are "extremely positive" for gold, according to Wendt from MineLife.
In contrast, gold mining companies were also priced higher: Newcrest Mining Ltd., Australia's largest producer, increased as much as 5 percent in Melbourne, while Northern Star Resources Ltd. rallied by as much as 2.5 percent and Evolution Mining Ltd. advanced by as much as 7.5 percent.
Palladium also benefited from the optimism surrounding safe haven investments, as well as its own collection of fundamentals - especially in a multi-year deficit as demand rises among auto catalysts in the midst of more stringent emission standards.
Meanwhile, Sugandha Sachdeva, Vice President of Religare Commodities Limited said, gold price has infringed the "psychological barrier" of $1,535 per ounce on the international markets, while breaching the Rs41, 000 per 10 grams resistance on the Indian market, one of the world's biggest gold trading sectors.
Interestingly, gold price remains above these rates in both the international and domestic markets and traders are therefore anticipating another gold price rally in the coming days.
