GLOBAL – Gold has once again proved to be the safe haven of choice in periods of uncertainty and high volatility.
Demand for the precious metal has been increasing since the onset of the COVID19 economic crisis and continues to remain high during the crisis causing prices to tangentially rise to historic levels.
The London Bullion Market Association’s (LBMA’s) gold price hit an all-time record high at $2 034.45/oz on August 5 – representing the first time in its more than 100-year history, that the London price of gold has exceeded $2 000 a troy ounce.
The new record price continues gold’s rapid rise from the metal’s opening price on January 2 at $1 520.55/oz.
Since then, gold has gained 33.8% in the 149 trading days to date, breaching $1 900/oz for the first time on July 24.
Previous milestones were passed on March 14, 2008, with a value of $1 000/oz, and April 20, 2011 with a value of $1 500/oz.
A report by Mining Weekly, indicted that the price of gold has risen some 621% in the 20 years of this century.
Further, London-traded gold volumes have been exceptional in the past few days, setting a record high on July 30, when 89.36-million ounces, valued at about $174-billion – which is over 50% higher in value terms than the previous record − changed hands.
Analysts argue that the trend in increasing demand for gold is expected to continue in the next several weeks and months simply because of the tremendous amount of political and financial market uncertainty that is clouding the immediate future currently.
According to Commodities and financial advisory firm CPM Group managing partner Jeff Christian, the currently high trading gold price is likely to remain near the $1 900/oz mark in the near term as political and economic uncertainty remain high, especially within the US.
“It is a precarious time and this is set to keep the gold price relatively well supported,” Jeff Christian said.
LBMA CEO Ruth Crowell says she can think of no clearer demonstration of gold’s role as a store of value than the enthusiasm with which investors across the world have turned to the metal during the unique social and economic turmoil of the past few months.
“Gold has once again proved to be the safe haven of choice in periods of uncertainty and high volatility.”
The first London gold price auction, now known as the LBMA gold price, took place on September 12, 1919.
Today, the LBMA gold price continues to be set in London and remains the international benchmark price for the gold market.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE
