Precious metals are making gains as gold rises 1.23% today to hit $ 1,840 an ounce today, although it's silver that steals the show with its highest result since 2016.
With the government and central banks providing excessive incentives, the new normality benefits metals as much as equities, which have recovered strongly in 2020.
Expectations of even more momentum and lower interest rates in the face of rising debt and coronavirus infections, the slow economic recovery and tensions between the US and China have prompted investors to continue buying the yellow metal.
– Charlie Morris (@AtlasPulse) July 20, 2020
"I wouldn't be surprised if gold tested the 2011 highs of around $ 1,900 an ounce." said Thomas Taw, previously head of the APAC iShares investment strategy at BlackRock.
With virtually zero interest rates, gold and bitcoin become far more attractive if the real return on alternative investments becomes negative.
A huge spending program of € 1.82 trillion (over $ 2 trillion) will also be agreed at a meeting of the heads of state and government of the European Union in Brussels, while US lawmakers are due to start talks about an additional law to support corona viruses .
All the money that central banks are pumping into the market means another currency devaluation that should help gold "benefit as a store of value" and of course Bitcoin.
Silver, gold, Bitcoin, etc. all seem to be ready to take explosive steps considering how much money is printed worldwide. Here is a chart or silver for the first month that goes back 10 years. pic.twitter.com/i9kHa9TVmi
– "Kyle Bass" (@ Jkylebass) July 21, 2020
However, gold is currently stealing the thunder, with Bitcoin falling 6% since May 7, when the market was just over $ 10,000. Billionaire Paul Tudor Jones also announced that his fund is buying the digital asset that calls Bitcoin the "fastest horse" and inflation hedge, while gold rose 7.5% over the same period.
While Bullion has enjoyed all of the bullish factors, Bitcoin has been in trouble all the time after rising to $ 10,000 after the March sale. The range in which Bitcoin was traded narrowed, the price range for a month was actually at an all-time low, and volatility also declined.
Today, however, Bitcoin is making some moves after a long time, rising above USD 9,400, with the "real" trading volume also increasing, albeit slowly, to USD 1.3 billion.
Meanwhile, Citigroup analysts say gold that is hitting a new all-time high is "just a matter of time". The yellow metal has risen by 20.5% since the beginning of the year.
The precious metal has already set new records this year in G-10 and the most important currency of the emerging countries. Gold is expected to rise to a new ATH in the six to nine months, with a 30% chance of surpassing $ 2,000 an ounce in the next three to five months. Last month, Bank of America made an even higher peak forecast at $ 3,000 an ounce.