Gold price reaches all-time high on fresh bout of global uncertainty

The gold price soared to an all-time high yesterday amid a fresh wave of investor concerns relating to the COVID-19 pandemic and worsening relations between the US and China.

Spot gold rose to reach US$1,945.10 per ounce, surpassing the previous high set in September 2011 and putting the $2,000 mark firmly within reach. The price closed 2% up at $1,936.81 per ounce at the end of the day.

So far this year, gold has risen by over 20% in the face of unprecedented economic strain due to COVID-19 induced lockdowns around the globe. Geopolitical issues also came to the fore yesterday after China took over the premises of the US consulate in the city of Chengdu.

This follows a similar move by the US to shutdown China’s consulate in Houston amid accusations of spying. Secretary of State Mike Pompeo said Washington and its allies must use ‘more creative and assertive ways’ to push the Chinese government to change.

This increasingly hostile rhetoric has worried investor markets, according to Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities, and helped push the gold price to record levels.

Meanwhile, global COVID-19 cases rose to over 16.13 million, driving expectations for more stimulus packages to stem the economic blow.

“As long as the [virus] situation gets worse, the market is discounting more stimulus for a longer period of time and in bigger quantities,” said Edward Meir, analyst at ED&F Man Capital Markets, to Reuters.

Silver also climbed by 7.5% yesterday to take its July streak past 30%. The precious metal is on course for its best month on record.