Les Echos (France): gold sets a new historical record

Quotes reached 1 930,48 dollars per ounce in trading on Monday morning, exceeding the last historical peak of September 2011. On the background of the economic crisis in pandemic and a weak dollar, investors are actively investing in exchange traded funds (ETF) associated with physical gold financial products.

The glitter of gold becomes stronger. Friday night the price of an ounce reached 1 906,58 of the dollar, and on Monday morning — 1 930,48 dollar. This historical figure has surpassed even the record of September 2011: 1 921,17 dollar.

Since the beginning of the year, the price of gold increased by 25%, which was the highest growth in a decade. An unprecedented deal! Eventually gold became the most profitable investment of the year, beating even the Nasdaq which has scored just over 15%.

Negative interest rates (now for him are the bonds of 14 trillion dollars), weak dollar, fears about economic consequences of a pandemic, geopolitical uncertainty between Beijing and Washington have all contributed to skyrocketing prices for the precious metal in recent months.

Bad news about the American economy

Came on Friday worrying economic news from the United States began the final push for the new record. Green bill showed signs of weakness: the dollar index is at its lowest level since September 2018.

The labor market recovery is slowing. The number of weekly registrations of unemployed in the United States first began to grow after the start of the slow decline at the beginning of April. All of this is probably due to the rapid growth of new cases of infection covid-19 and adopted in response measures.

As for the tension between the US and China, it has increased dramatically. Friday, China has adopted a decision to close the American Consulate in the big city of Chengdu, three days after the closure of the Washington D.C. Chinese Consulate in Houston, which was named “the focus of espionage and theft of intellectual property”.

Interest in the ETF

Over the past few months the demand for gold is supported including departmental interest of investors, particularly ETFs. In June, the total value of these exchange-traded products set a new record 3 106 tons. Since the beginning of July was bought 111 tons of gold, and the first of the year 622 tons, close to the record 2009 (644 tons).

Owning many gold reserves of Switzerland sent a large number of precious metal (68.3 tons) in the United States in response to very high demand. In the United States is Gold Trust, the largest gold ETF.

The demand for jewelry

While individuals bought some gold from the beginning of the year. The demand for jewelry fell by two-thirds during a pandemic because of the impact on the global economy. Mainly, this is due to the fact that the people of China and India, two largest countries-consumers, have bought much less gold from isolation.

The unprecedented rise of gold may continue. UBS believe that by September, the quotes can cross the mark of $ 2,000. In turn, analysts of Bank of America reviewed in the April forecast to $ 3,000 a year and a half.