THE PRICE OF GOLD IS APPROACHING ITS 7-YEAR HIGH 1Gold International 

THE PRICE OF GOLD IS APPROACHING ITS 7-YEAR HIGH

Gold prices jumped to a new 7-year high on Monday as concerns about the spread of the corona virus prompted investors to search for safe havens and this caused global equity markets to plummet.  

The February Gold Futures, the most active nearly 40 million ounce contract traded that day, should close above $1,580 an ounce on the Comex market in New York.

This would be the highest closing price since April 9, 2013, although gold was trading over $1,600 an ounce on an intraday basis two weeks ago when investors were looking for less risky assets after the murder of an Iranian general in a US drone attack.

Bloomberg reports that the stocks of exchange-traded funds backed by physical gold rose within 25 tons of the record level recorded in November due to the effects of the rise in the corona virus.

Gold ETFs and similar products saw net inflows of $19.2 billion or 400 tons in 2019 after stocks recovered in December, according to the World Gold Council. In the fourth quarter, ETF stocks reached an all-time high of 2,900 tons.

The new strain of corona virus, which originated in Wuhan in central China, infected nearly 3,000 people and killed 82 people. This caused Beijing to extend the New Year holidays to February 2nd.

Gold is still cheap as compared to stocks.

Even after today’s strong correction of US stocks on a historical basis, gold is still a cheap asset.

Today you need just over two ounces to buy the market. The relationship between the price of gold and the S&P Index of the 500 largest stocks in the United States was the same in September 2007, when an ounce of gold could be picked up for less than $600.

Share this article on

Related posts

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

Copperbelt Katanga Mining will use the information you provide on this form to be in touch with you and to provide updates and marketing.