The price of gold reaches its highest value in nine years due to the pandemic
The spread of the coronavirus in Latin America and the new outbreaks in the United States, Germany and China have put fear into the bodies of investors. The stock markets have been in a state of flux for weeks, and in the face of the uncertainty surrounding the virus, gold has once again become the most popular refuge for investors. Its price reached $1,796 per ounce on Wednesday, its highest value in nine years, although it has subsequently collapsed and is now trading at around $1,780 per ounce.
"The condition of refuge asset resonates again in the market to the resurgence of the coronavirus that is taking place in Asia and Europe, which brings the price of gold to $ 1,800 per ounce, "said Diego Morin, an analyst at the investment platform IG, in statements collected by the agency Efe. Javier Molina, spokesman of the investment platform eToro in Spain, considers that the golden metal is at a crucial moment. "Gold has experienced a spectacular rise that has left it, at present, with a price of great resistance in the short, medium and long term: the 1,800 dollars. This figure leaves it at historical highs," he said.
Despite the price increases, the industry has also suffered the blow of the pandemic. Gold mines and some refineries have been closed, and intercontinental transport has been restricted to meet the demand for this precious metal. South Africa, one of the world's major producers, was forced to close the Mponeng gold mine, the largest in the world, due to the positive outcome of 164 of its workers and it has not been the only facility affected.
Experts in the sector point out that demand for this precious material has shot up in recent months, but at the same time there has been a lack of supply due to restrictions on extraction, refining and distribution. These two situations favour further rises in the price of the precious metal, which could also affect the price of silver. Demand has been multiplied by its refuge asset value and, at the same time, supply has been restricted due to the impact of COVID-19 on the ore supply chain. This may take the value of gold to unprecedented levels.
Bill Baruch, a commodities analyst at Blue Line Capital, believes that the price of gold may reach $2,000 by the end of the year. Uncertainty in the markets could lead the precious metal to surpass its historical record of September 2011, when the price reached $1,921 per ounce. Bank of America has gone further and predicted that in the next 18 months the metal could reach a price of $3,000 per ounce. Carsten Menke, an analyst with Julius Baer, predicts that the demand for investing in gold will remain as long as the uncertainty lasts, he says in the coming months in the absence of a vaccine.
