Gold has always been a safe haven during times of economic volatility, as its physical scarcity and steady demand appeals to those looking to escape tanking markets. The yellow metal has caught the eye of the investors as experts predicted its price could soar to a historical high of $2,000 ounce in the next two years. The growing tensions between Iran and the western nations and slowing global economies are all contributing to a feeling of uncertainty. Gold has also been firming as the world witnesses protests in Hong Kong and also the uncertainty around US-China trade relations.
Analysts forecast that gold price could surpass that level “at some point in the next year or two”, pushed higher by escalating trade tensions between America and China and heightened fears of a global recession. “ From a bird's-eye view, lower for longer nominal and real interest rates, escalating global recession risks – exacerbated by US-China trade tensions – heightened geopolitical rifts amid rich equity and credit market valuations, coupled with strong central bank and investor buying activity, are all combining to buttress a bullish gold market environment,” analysts said.
The analysts' "medium term" target represents a new historic high for precious metal, which last peaked in August 2011 when it reached $1,830.55 per ounce. Also, uncertainty over the 2020 presidential election combines with a sputtering domestic economy. The People's Bank of China has been stockpiling gold in its reserves to 62.45m ounces in August, from 59.24m in November, for eight months in a row, signalling the nation expects continued market volatility and a prolonged trade war with the US.
The coveted metal surged through 2019, and is up about 17% year-to-date. Riding on the developments in the Persian Gulf, the Gold rates jumped to the USD 1,400 per ounce level in June this year. This is the first time that the Gold rates have been ruling at such a high level, in the last six years. Before this spike, few analysts had claimed the Gold rates will have crossed the USD 1,400 mark by the end of 2019. But in the first half of the year itself, Gold has jumped to more than $ 1,400 per ounce, creating a stir in the international market and investor groups.
