Gold Price Breaks Above Neutral, Settles Above $1,800 oz

Gold Price Breaks Above Neutral, Settles Above  $1,800 oz

#Gold #XAU #GLD #HUI #WGC #bullion #precious #metal #asset #USD C19cronavirus #China #HeffCap #inflation

$XAU $GLD $USD

  • The price of gold has risen above the 1,800 psych mark
  • Spot gold up 17% in the 1st 6 months of Y 2020
  • Gold ETF net inflows in i-H of Y 2020 exceeds full year record set in Y 2016
  • US-China tensions, C-19 coronavirus questions, central bank actions, softening USD driving price North
  • SPDR Gold Shares and iShares Gold Trust see greatest inflows

Wednesday morning the gold spot price crossed the Key 1,800oz mark for the 1st time since Y 2011 on a backdrop of Bullish forecasts.

HeffX-LTN’s and Goldman Sachs expects the metal could reach 2,500/2000 respectively within the next 12 months, and Bank of America sees it touching 3,000 in 18 months.

Gold’s all-time record price at 1,921.17 was set in September 2011.

Gold has been running this year due to Western investors seeking safety in the precious metal asset.

The global net inflows into Gold ETFs was $39.5-B in 1-H of this year, according to the World Gold Council (WGC), exceeding the record set for highest annual inflows set in Y 2016 at $23-B. The demand has been extraordinary, inflows in 1-H of Y 2020 exceeded multi-decade record marks of net gold purchased by central banks in Ys 2018 and 2019.

As world economies confronted uncertainty related to the virus chaos and central banks introduced aid/relief/stimulus and cut interest rates, gold-backed funds have seen 7 months running of positive flows as of June. 

Speculation over the potential impact of a 2nd wave of COVID-19 infections on an already fragile global economy caused a renewed wave of fear and uncertainty. Meanwhile, ongoing asset purchases by central banks to mitigate the impact of the pandemic further reduced the opportunity cost of holding non-yielding assets such as gold,” said the WGC report.

The softening of USD also tends to driver gold prices higher.

As the price of gold rose 17% over 1-H of this year, global gold ETF holdings in tonnage increased by 25%. Global daily trading volumes reached a record $233-B per day in March and was at $156.9-B per day in June above the Y 2019 daily average of $145.7-B. By the end of June, gold-backed ETFs held 3,620 tonnes of gold worth $206-B.

The SPDR Gold Shares (GLD) and iShares Gold Trust funds lead the ranking of funds with greatest inflows in Dollar/Tonnes terms during 1-H.

Gold miners are participating in this rally.

Have a healthy day, Keep the Faith

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.