More Record Gold Prices - 18 May 2020
In the last few days, a handful of countries have started to emerge from lockdown, easing their restrictions on business in the hopes of kickstarting the economy back to its former strength. However, these hopes have been quashed by fears of a second wave of fresh covid-19 cases.
Anti-lockdown protestors the world over have also highlighted the delicate balancing act governmental bodies must currently execute, juggling the economic incentive, and arguably great risk, of re-opening businesses, and causing another spike in infection. Those hedging gold against the current downturn have enjoyed another surge in value thanks to the looming pressure of another recession on the horizon. The Bank of England’s chief economist has revealed reactionary measures, such as negative interest rates, which would see private banks paying the central bank for having funds deposited. This uncertain climate and response to infection has cleared the way for another record gold price across Europe, seeing the precious metal’s value hit £1,458.73 and €1,633.30 per troy ounce respectively.
Meanwhile, across the Atlantic the USA saw the spot price of gold soar to heights not seen for seven and a half years, settling at $1,764.20 per ounce in the early hours of May 18th. The new peak in price can partly be attributed to a bleak warning from the Chief of the Federal Reserve (Jerome Powell) stating that a full recovery of the US economy, being dependent on the speedy development of a covid vaccine, would likely happen late 2021 and potentially later. Prior to this the US hadn’t seen such a high gold price since October 2012 as relations between the superpower and China began to break down.
Gold is currenly priced at £1,453.22 ($1,764.05) per troy ounce, which is a 5.45% rise in its value in sterling since last week. All these factors around the world could see gold becoming more attractive for investors as they seek shelter from these damaging economic circumstances.
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