Gold price surges to record high amid mounting uncertainty at pandemic recovery
The price of gold has reached recorded levels, rising to $1,926 (£1,501.44) per ounce amid growing uncertainty surrounding the Covid-19 pandemic economic recovery and growing US-China tensions.
Gold – seen by investors as a safe asset during turbulent times – rose by more than $30 (£23) in Asia on Friday, breaking the previous record of $1,920.30 (£1,496.38) set in 2011.
The price of silver also jumped as rising coronavirus infections and job losses in the United States fuel concerns of a return to 1930’s levels of depression.
Precious metals, along with bonds, often are seen as stores of value when financial markets decline. Forecasters watch their prices as an indicator of how investors see the economic future.
The value of the dollar has declined as the US’s relationship with China continues to deteriorate.
US diplomatic staff left their consulate in the Chinese city Chengdu on Monday, after a 72-hour deadline expired.
China ordered the closure in response to the US closing the Chinese consulate in Houston, Texas, last week.
With the dollar substantially weaker, “a lot of funds are moving into gold right now,” said Edward Meir, analyst at ED&F Man Capital Markets.
“And as long as the (virus situation) gets worse, the market is discounting more stimulus for a longer period of time and in bigger quantities, and all of that is bullish for gold,” he added.
It comes as the coronavirus pandemic shows no signs of slowing down, with large numbers of deaths and cases being recorded in the US, India and much of South America.
Elsewhere, China recorded its biggest rise in cases since April, while Australia recorded its worst ever daily infection tally as authorities continue to grapple with multiple outbreaks in Melbourne.
India has recorded nearly 50,000 new daily cases of Covid-19, the highest daily tally so far, according to the ministry of health and family welfare.
Global infections stand at just under 16.2 million, with nearly 650,000 deaths, according to Johns Hopkins figures.
Additional reporting by agencies
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