Gold closes near nearly eight-year highs

Gold closes near nearly eight-year highs

Gold rates closed practically unchanged on Monday, near to an almost eight-year high reached last week. It is a result of international coronavirus cases hitting hopes of an economic recovery.

The constant spread of the coronavirus limited optimism about a quick recovery in the global economy, sending out global stocks to two-week lows.

Michael Hewson, a chief expert at CMC Markets UK, believes that the catalyst for gold to hit $ 1,800 an ounce is already here. Growing cases in the United States and issues about the 2nd wave in Europe and Asia are most likely to slow down any possible rebound in the economy. That will make gold a high-demand property.

Area gold fell 0.1% to $ 1,769.52 an ounce, to $ 9.54 from $ 1,779.06 it touched on Wednesday, its greatest level since October 2012. On the other hand, US gold futures acquired 0.1% to $ 1,781.20.

Amongst other valuable metals, palladium got 2.5% at $ 1,906.15 an ounce, while platinum increased 2.1% to $ 807.39 an ounce and silver included 0.1% to $ 17.77 an ounce.

Coronavirus cases have increased in the United States, where California bought bars to close on Sunday, and Washington state stopped briefly plans to resume the economy. At the very same time, infection rates continue to rise in countries like Brazil and India.

Gold is an excellent protective guard versus present economic and social ups and downs

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The stock market healing is losing steam. There are very few reasons to keep the bull market going any longer, Sayed stated. Main banks worldwide have currently decreased stock prices, and another big round of stimulus is not likely..

And with the trillions of dollars in stimulus from the federal government and the Fed given that the beginning of Covid-19, it needs to come as no surprise if inflation begins to rise. That will be another blow for savers.

Hussein Sayed, a primary market strategist from FXTM, kept in mind that financiers might find the valuable metal a better option to many other property classes in todays macroeconomic environment.

All of this should make gold defense against unfavorable returns, currency decline, an unforeseen increase in inflation or deflation, bad financial performance, and shocks in the stock markets, Sayed concluded

The United States 10-year real return, which takes inflation into account, is in unfavorable territory. Real yields in Europe are even lower, Sayed continued. The investment strategist called this situation horrible news for people approaching retirement as pensions will fall in worth.

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Michael Hewson, a primary analyst at CMC Markets UK, thinks that the driver for gold to hit $ 1,800 an ounce is currently here. That will make gold a high-demand property.

There are not many reasons to keep the bull market going any longer, Sayed stated. All of this should make gold security against unfavorable returns, currency decline, an unforeseen boost in inflation or deflation, bad economic performance, and shocks in the stock markets, Sayed concluded

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