Gold price smashes past 2000 dollars per ounce

Fuelling bullion’s upward path has been economic and political uncertainty underpinned by the coronavirus pandemic and the response by central banks — to slash interest rates and flood markets with cash. The slide in the rival safe-haven dollar was the tipping point for gold’s latest surge, with the greenback plunging to a two-year low. This backdrop is enhancing demand for the yellow metal.

“Bullion has surged more than 30% so far this year to a record high and is one of the best-performing assets in 2020 as a result of increased safe-haven demand during these uncertain economic times. To some degree, gold replaces the USD,” ” says Alan Demby, Chairman of The South African Gold Coin Exchange and The Scoin Shops.

However, because the rally has been so rapid, a downward correction is likely and could be brutal, before the market attempts another stab higher.

Demby adds: “The rally was on solid ground, but I’m mindful of a correction given its pace.

The speed of the upswing should sound a warning bell … as this can often precede a correction. I believe the outlook for gold remains constructive and I see a continued improving volatility backdrop, so there’s no sign that the long-term trend is changing,”