Gold prices are continuing to rise as investors around the world seek a safe financial haven for their investments. Worries regarding further coronavirus outbreaks seem to have died down a little, with most people becoming used to the new reality of the situation. However, weak global economic data is helping fan investor fears. On Thursday, Gold settled just under $1,900, pretty much breaking its previous all-time high for the precious metal.
Gold futures with delivery for next month ended Thursday up a solid 1.3% to $1,890 per ounce, having hit as high as $1,897.7 per ounce earlier today. This already eclipsed the previous, 2011 high for gold, where the commodity hit $1,892 per ounce. While prices still failed to breach the all-important $1,900 price barrier, gold has been doing so well that hitting $2,000 per ounce now seems like a genuine possibility now.
Weak economic data, extremely low interest rates, as well as a flood of stimulus programs from the central banks around the world are all encouraging investors to move away from cash and bonds and move into gold. Despite strong performance from the stock market, many investors still remain paranoid that things are going to reverse. At the same time, some investors think that stocks are overpriced. The NASDAQ hitting an all time high recently kind of supports this line of thought.
The U.S. had previously announced its jobless numbers, which were a bit of a disappointment for some investors. Claims had risen last week for the first time since March, a somewhat foreboding sign. Traders will also be paying close attention to other macroeconomic numbers from the U.S. The main two pieces of information include upcoming housing data as well as manufacturing growth. If these results end up being disappointing as well, don’t be surprised if gold prices end up surging in the days and weeks to come.
“Investments, investors and central bank holdings are driving gold through market risk uncertainty; it existed before 2020 — geopolitical risks, a potential change in regime in the U.S., tensions with trade — all of these factors were there, but covid-19 has just amplified it, made it a lot more concerning and a lot more challenging for people,” said Joseph Cavatoni, a managing director at the World Gold Council. “So what you see is the price will continue to trend up.”
Most gold-mining companies have seen their stock prices explode as well. With higher commodity prices comes higher profit margins, and gold miners that typically don’t see much growth are now surging in popularity. Both Newmont and Barrick Gold have seen their shares jump drastically over the past two or three months in particular.
Other precious metals, such as silver, have also seen strong surges as well. Back on Wednesday, silver prices rose to hit a fresh seven-year high at around $23 per ounce. Palladium, a sister metal of platinum, has been surging as well, although this case is a little bit different. Unlike many other precious metals, palladium has plenty of industrial demand in catalytic converters in cars. Palladium has long surpassed gold as the most precious metal on the market. Prices ended up hitting $2,216 per ounce as of Thursday.