COVID Pandemic Will Support Gold In Long Term as Highlights Strong Fundamental Reasons To Invest In Gold

Gold Hits Record High: Sprint Or Marathon? (Investment Update from the World Gold Council – 30 July, 2020)

Gold has reached new highs in nominal terms but it’s still below its inflation-adjusted record* (Chart 1)

COVID-19 pandemic may bring structural shifts to asset allocation and there are strong fundamental reasons supporting gold investment longer term.

Gold has been on a generally positive trend for the past few years and the onset of the global COVID-19 pandemic has made gold’s relevance as a hedge even more apparent and accelerated its price performance.

Gold increased by 17% during the first half of 2020, moving up by an additional 10% in July.

The most recent price move has come fast which, combined with markedly weak consumer demand, may result in higher gold price volatility in the near term. However, we believe the COVID-19 pandemic may bring structural shifts to asset allocation and that there are strong fundamental reasons supporting gold investment longer term.

Gold broke a new high on 28th July, reaching US$1,940.9/oz on the LBMA Gold Price PM (PM Price) and topping US$1,981.3/oz intra-day.

On the heels of this milestone, investors are asking two key questions, which we explore in this report: ‘How does this compare to previous highs?’ and ‘Is the price rally sustainable?’

Full Report from World Gold Council here


Gold and silver look overbought in the short term and corrections seem likely. For those who do not own precious metals, weakness should be used to dollar cost into physical.


NEWS and COMMENTARY

Gold slips as Fed’s continuing ultra low rates whets risk appetite

China Banks, Regulators Move to Cool Gold Rush

Anxious investors are pushing gold prices to all-time highs

The Other Reason Silver Is Soaring: Disruptions in Latin America

Where did the gold and silver for Britain’s coins come from?

India’s banks are racing to lend against a $1.5 trillion hoard of gold

India Considers Amnesty for Citizens Hoarding Gold Illegally




GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)

29-Jul-20 1954.35 1950.90, 1506.80 1502.39 & 1663.54 1659.24
28-Jul-20 1931.65 1940.90, 1499.15 1501.48 & 1647.70 1654.23
27-Jul-20 1940.55 1936.65, 1511.30 1504.78 & 1659.56 1647.70
24-Jul-20 1893.85 1902.10, 1486.67 1490.30 & 1631.55 1638.09
23-Jul-20 1882.35 1878.30, 1480.28 1477.47 & 1624.47 1621.54
22-Jul-20 1851.00 1852.40, 1462.85 1456.91 & 1604.82 1598.44
21-Jul-20 1823.20 1842.55, 1436.86 1449.35 & 1594.21 1608.36
20-Jul-20 1810.30 1815.65, 1437.92 1438.18 & 1580.21 1590.87
17-Jul-20 1802.90 1807.35, 1435.47 1442.45 & 1578.98 1581.07
16-Jul-20 1804.60 1807.70, 1438.09 1436.04 & 1583.72 1581.56
15-Jul-20 1809.30 1804.60, 1436.22 1441.31 & 1582.96 1579.57
14-Jul-20 1798.20 1801.90, 1436.58 1440.62 & 1583.14 1581.71
13-Jul-20 1808.05 1807.50, 1435.23 1432.26 & 1598.32 1591.68

 


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Mark O'Byrne

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