Gold prices were up 0.5% at $1,678.25 per ounce on Friday. Earlier, it touched its highest since January 2013, $1,689.65, or 1.2%.
U.S. gold futures increased 0.5% to $1,679.50. Metal prices were on track for their biggest weekly boost since January 2009. The global spread of the coronavirus made growth prospects unclear and sent investors rushing for safe-haven assets.
Peter Fertig, Quantitative Commodity Research analyst, said that the usual out of risky assets into safe havens flow is feeding gold’s rise.
Gold is on way for its biggest weekly gain since January 2009. Sergey Raevskiy, an analyst at SP Angel, said that the market has no idea of what’s going on. Investors are purchasing bonds as well as gold as insurance from the deteriorating economic outlook.
Gold seems to be one of the most appealing assets to own now. This is short-term interest rates fall to near zero. However, a drastic and prolonged drop in assets prices may not be right for the precious metal as traders cash in from gold to pay off margin calls in equity, said Phillip Futures analysts in a note.
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Despite not Being the King of Metals, Gold Retains the Throne
Gold maintains its throne, although it has ceased to be the most expensive metal for some time. The price of rhodium and palladium far exceed the prices of gold. Still, the growing demand for a market in which the fight to reduce global warming is also imposed, none of them is a competitor for the precious metal.
Neither of the platinum group has a robust foundation that for years underpins gold as the oldest form of money in constant use.
According to a recent analysis by the World Gold Council financial and geopolitical uncertainty, combined with low bank interest rates, could reinforce the investment demand for this metal in 2020.
In addition, central banks were net buyers of the precious metal by the tenth consecutive year in 2019 when world reserves grew by just over 650 tons. According to the source, net purchases of gold by central banks will probably remain strong. Even if they are lower than the historical highs seen in recent quarters.
Also, the prices of this asset reached record levels in most major currencies. Except with the US dollar and the Swiss franc.
During the last week of February, the fear of the expansion of the Covid-19 coronavirus filled the stock markets with dread. However, gold hit peak prices for seven years and stood above %1,800.
Given this behavior in the price of the precious metal, Goldman Sachs Group Inc. raised its forecast. It predicts that gold will reach $1,800 per ounce during the next 12 months.