Gold bulls: Is the metal close to achieving a new record?


Direct – Ahmed ShawkyGold witnesses its best days in several years, topping the investment scene thanks to the crisis of the Corona Virus.

It was a yellow metal march with the epidemic The best among asset classes Until now, as prices have strengthened since the start of the Corona Virus journey, and although the metal suffered some bumps in the middle of the trip, it stuck to the upside until it exceeded $ 1,800 an ounce.

And with The settlement of trading yesterday, Wednesday The price of futures contracts for the precious metal was $ 1820 an ounce, the highest level since September 2011 when it reached a record high at $ 1921, making the metal close to breaking the highest level in its history.

(Gold’s performance from the start of the year to the Wednesday session settlement, according to Bloomberg)

Usually gold rises in times of turmoil and uncertainty, which is evident in light of an epidemic ravaging the bones of the global economy as well as geopolitical and commercial tensions, which increases Yellow metal dial.

وتواصل Possession of gold in boxes Investment traded on the stock exchange rose for the seventh consecutive month in June, while the enthusiasm of optimistic investors showed “bulls” that exceeded pessimism about the “bears” matter.

According to the monthly report issued by the World Gold Council, the possession of gold rose by about 104.3 tons, which is equivalent to $ 5.6 billion, or 2.7 percent of the assets under management.

This increased the total global gold holdings in funds traded to a new record at 3620.7 tons, as the World Gold Council indicates that the economic and geopolitical environment remains supportive of gold investments.

On the other hand, Central banks around the world continued to buy Gold during the month of May last at a relatively stable pace, with net purchases reaching 39.8 tons.

This reading is higher than the monthly average of 35 tons during the first four months of the year, according to the World Gold Council, which is expected to keep central banks recording net purchases this year, albeit at a lower rate than the past two years.

In addition to the demand for the yellow metal, which strengthens the continuation of its gains, many investment banks based on several reasons that could lead gold to a record high this year.

Is the yellow metal really close to its highest level in its history? Just as gold has benefited from massive financial and monetary support since the beginning of the Corona pandemic, the continuing increase in Covid-19 cases and the uncertainty about the economic recovery threaten to cut consumer spending and job gains, and thus the need for more support from central banks and governments.

The US Congress plans to pass an additional stimulus package before the legislators’ summer vacation in early August, when the economic aid bill of $ 2.2 trillion was not enough to support the economy while the damage to the epidemic continues.

This is in addition to the Fed’s corporate lending programs with a pledge to purchase unlimited amounts of bonds to support companies and the economy.

More Federal Reserve support may be on the way, according to CNN member Richard Clarida in comments to CNN that policymakers are likely to resort to additional guidance and asset purchases if the economy needs more Help.

Gold tends to benefit from low interest rates and widespread stimulus measures from central banks because it is widely seen as a hedge against inflation and a devaluation of the currency.

These are the complex reasons One of the main factors is the uncertainty about the epidemic, which was enough to cause many investment banks to raise their expectations for gold prices sharply, but expect to rise to a record high level.

Giles Coghlan, an analyst at HCMM, told CNBC that investment banks encouraged their high net worth customers to allocate gold in their portfolios, which indicates that we have not entered into Recover after the epidemic so far. “

And on top of thatPaul Siana, chief analyst, wrote Bank of America“In a note to customers last month that if the gold price managed to surpass the resistance level at $ 1,800 an ounce, the price of the precious metal could rise to an all-time high of $ 1920.70 an ounce and recorded in 2011.

The analyst pointed out that the technical analyzes indicate that the price of gold may reach a new historical level in the second half of this year, especially in the third quarter, in addition to that there is a wave that leads gold prices to 2000 dollars an ounce already, with an upward scenario ranging from 2114 dollars to 2296 dollars An ounce in the next period.

The analyst attributed the expectations of a rise in gold prices to doubts about the speed of recovery in the global economy with the continuation of a record increase in Corona injuries in the United States, which made the recovery in the form of a letter.V“Less likely at the moment.

Fear Economist Mohammed Al-Aryan, senior advisor Economists at Allianz, in an analysis by Bloomberg, that with the health concerns of an increasing number of states being forced to suspend openings or other closures and some companies and families withdrawing from active economic ties, a cloud is forming during the third quarter, threatening the depth and breadth of the economic recovery.

Analysts also expect Goldman Sachs Gold prices rise to $ 2000 during the next 12 months, noting: “The demand for investment in gold tends to grow in the early stage of the economic recovery, driven by fears of continued decline and low real interest rates.

In continuation of the more optimistic outlook, Olli Hansen, Head of Commodity Strategy, anticipatedSasco Bank “Gold prices continue to rise In the second half of 2020, it is likely to rise to a record level in the coming years.

The “Hansen” that the reasons for supporting the rise in gold in the second half of the year included “the political need” to accelerate inflation to support levels of debt and increase the availability of global savings in addition to geopolitical tensions before the US presidential elections in November.

In the end, The current environment supports the continued rise in gold prices according to the majority of expectations, from economic stagnation and low interest rates to the massive financial and monetary incentives that multiply the budgets of central banks, particularly the Federal Reserve. Will the metal end in 2020 at a record high?


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