Categories: Market Overview

Gold Price Blings 4-Week Highs as Analysts Predict $3,000 in 2021

The gold price has hit a four-week high against the U.S. dollar. As the Dow Jones continues to stagnate in a coronavirus recession, the spot price of gold hit $1,738 earlier today.

It will most likely continue to rise, passing levels last seen in 2012. Because with the coronavirus pandemic set to have lingering effects on the U.S. and global economy for several months to come, it’s the best hedge against a stagnating Dow Jones.

The gold price is breaking all kinds of records at the moment. Yesterday, it approached a three-week high, hitting $1,733.20, its highest since April 24. However, today at 03:44 UTC+1 it rose to $1,738, its highest since peaks of $1,788 a month ago.

In fact, this is approaching gold’s highest level in years. Back in September 2012, it stood at $1,749. Back in July 2011, it stood at a mighty $1,909, according to mining.com. The price of gold is fast approaching these all-time highs. And as with the climb to $1,909 in July 2011, massive quantitative easing is fuelling its growth.

The Fed began a policy of near-zero interest rates and QE on 16 December 2008. Then, the gold price was only $837. Between then and August 2011, the gold price rose by 128%. And in a case of history repeating itself, quantitative easing is pushing the gold price to new highs yet again. Since March 23, when the Fed announced “unlimited” QE, the price of gold has risen by 16.4%. And compared to where the gold price was in August 2018, it has climbed by nearly 50%.

At the same time, while the price of gold has risen by around 18% over the last six months, the Dow Jones has fallen by 16.5%. Basically, there has been an inversion in movement, which is what you’d expect when the gold price and the stock market are negatively correlated.

Gold Price Blings 4-Week Highs as Analysts Predict $3,000 in 2021, CCN, May 15

The FxPro News Team

This team of professional journalists announces the most interesting and influential articles from the major financial media as a brief summary. All such news may have sufficient potential to affect the course of trading assets.

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