Gold prices today hit fresh record high, tracking global trend

Daniel Fowler
July 27, 2020

The price of gold rallied again Monday to close at a record for the second consecutive day as the dollar continues to weaken and tensions between United States and China showed no signs of abating, pushing investors toward safe-haven assets. Worldwide, there are 16,421,952 confirmed cases and 652,308 deaths from the coronavirus COVID-19 outbreak.

Interest rates are now near zero and dividend returns from companies are uncertain at best, with so many struggling.

It's now up around 28% this year.

As well as lacking in returns, investing in gold brings costs.

The precious metal closed the day up 1.8% at $1,931 a troy ounce for contracts for delivery in August.

Each bar weighs 400 Troy ounces (12.5kg) and is now worth £600,000 at today's prices., so that would cost about £60 per month.

Gold surged to a record high on Monday, but the precious metal's ferocious rally will likely run out of steam near $2,000, according to strategists at J.P. Morgan Chase & Co. Some experts pointed to the worsening of U.S.

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Eyes are on the Fed's policy meeting this week, with some predicting further measures to boost the economy - possibly negative interest rates - that could put more pressure on the dollar and send bullion above $2,000. The value simply rises and falls on investor demand.

Spot gold traded at $1,933.44 an ounce by 7:32 a.m.in London. It means that buyers using other currencies can, in fact, be paying the same for their gold, as they are able to buy more dollars for their money. China responded by ordering the closure of the US consulate in the southwestern city of Chengdu. The move was in retaliation for the USA closing down China's diplomatic base in Houston, Texas.

Overnight the greenback hit its lowest since September 2018.

The dollar extended its recent slide and gold rose to a record high as investors mulled simmering Sino-American tensions, the upcoming Federal Reserve meeting and signs the virus spread in the USA may be slowing.

Shanghai was slightly higher, having suffered big losses last week as China and the USA closed consulates in Chengdu and Houston, ramping up tensions between the superpowers.

"With the dollar significantly weaker, a lot of funds are shifting into gold right now, and as long as the virus situation continues to get worse, the market will discount more stimulus for a longer period and in greater amounts, and this is all positive for gold", said Michael Carter, Head of Global Equities at Osaka Matsui Management.

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