Popular Stories

Gold spikes to record as BofA predicts $3K price tag

gold earmarked for December delivery climbed to a record high above $2,000 an ounce on Tuesday, outstripping shorter-term futures contracts after the COVID-19 pandemic disrupted jewelry sales and led to a buildup of physical supplies.” data-reactid=”12″>Prices for gold earmarked for December delivery climbed to a record high above $2,000 an ounce on Tuesday, outstripping shorter-term futures contracts after the COVID-19 pandemic disrupted jewelry sales and led to a buildup of physical supplies.

Gold for December delivery rose $35.10 to close at $2,021 an ounce while front-month futures contracts, for August delivery, settled at $2,001.20.

Retailers in malls and dealers in New York City’s Diamond District are “up to their eyeballs” in unsold inventory due to COVID-19, George Gero, managing director at RBC Global Wealth Management and a member of the COMEX board of directors, told FOX Business.

RISK OF DELAYED, DISPUTED ELECTION RESULTS LOOMS OVER MARKET RALLY” data-reactid=”19″>RISK OF DELAYED, DISPUTED ELECTION RESULTS LOOMS OVER MARKET RALLY

Traders last week announced their intent to deliver 3.27 million ounces of gold against the front-month August contract, the largest single-day total since recordkeeping began in 1994, according to Bloomberg.

As a result, they are hedging and reducing their exposure to the futures market while becoming more active in the options market, he added. The result is a big discrepancy between the price of the front-month August futures and the December contract.

While the virus has caused disruptions on the physical side of the market, it’s also changing the landscape for how investors view the precious metal.

Already, governments have injected $20 trillion of fiscal and monetary stimulus, making up 20 percent of global gross domestic product. During the pandemic, investor demand for the metal has increased to 45 percent of the market, up from 25 percent.

“The global pandemic is providing a sustained boost to gold due to increased savings, growing inequality, vast capital destruction, declining productivity, rising public debt levels, and, most importantly, falling equilibrium real interest rates,” according to strategists at Bank of America, who think the precious metal will reach $3,000 an ounce over the next 18 months.

CLICK HERE TO READ MORE ON FOX BUSINESS” data-reactid=”25″>CLICK HERE TO READ MORE ON FOX BUSINESS

Central banks, which have bolstered gold prices since 2009, will likely continue to buy gold and be “quite supportive” of the precious metal’s price going forward, said Bank of America strategist Michael Widner.

View Article Origin Here

Related Articles

Back to top button