Now that gold has crossed the $2000 mark, investors are expecting it to head towards $3000.
Gold is in high demand by investors and this is keeping the rally alive in gold.
Even though gold was pulled down around 2% on Friday, the macro economic factors have still managed to push gold prices higher. Global monetary and fiscal stimulus is the key drive behind gold price rally confirmed spokesperson of RSBL.
After a drop in prices this Friday, gold managed to bounce back as the week opened. Gold prices steadied on Monday after a steep fall in the previous session, as concerns over a worseningCOVID-19 pandemic and intensifying U.S.-China tensions underpinned the metal’s safe-haven appeal.
Gold has always been considered as the asset to fall back on by investors in terms of financial crisis while inflation is on a rise. The Federal Reserve’s decision to not to push interest rates higher in 2019, brought about a surge in the price of gold. If we pull out the data from the history, it will be clearly ascertained that gold rates increase when interest rates fall below the rate of inflation, thereby turning return on bonds negative. Thus, investors turn to the safe haven asset of god despite it not yielding any results.
That is what has been happening over the past few months. With bond yields near zero in the United States and negative in Europe and Japan, investors have driven up the price of gold more than 30 percent this year after a gain of nearly 20 percent last year. In recent weeks, that surge has been turbocharged by growing expectations that all the money governments are pumping into their economies will reignite inflation.
Currently the need of the hour is to stabilise economies by providing financial support. And in the need to do so, gold and silver are going up. Printing of money is positively affecting precious metals stated the bullion king of India.
As interest rate go lower or negative, investors have money in the bank that will be essentially taxed as they’d have to pay interest on it. This is why people are buying gold, taking delivery of gold bars, and buying future
On one hand we have the uncertainty of the virus and on the other hand, we have the fiscal stimulus negotiations. The passage of another major stimulus package would likely mean more money printing, weaker U.S. dollar, and higher gold.
This week has a lot in store for gold-
Another major driver for gold next week will be rising tensions between the U.S.-China, especially after Trump signed a pair of executive orders that prohibit U.S. residents from doing business with China’s TikTok and WeChat apps.
Important data releases- the U.S. PPI , the U.S. CPI , the U.S. jobless claims, the U.S. retail sales and industrial production data on Friday.
U.S. President Donald Trump said that he might be getting involved if no agreement is reached by signing an executive order to extend enhanced unemployment benefits and impose a payroll tax.
Furthermore, U.S. President Donald Trump signed executive orders on Saturday partly restoring enhanced unemployment payments to the tens of millions of Americans who lost jobs in the pandemic, as the United States marked a grim milestone of 5 million cases.
The top gold dealers of India are planning to keep a close watch on the important numbers being released this week as it will create a significant impact on gold and silver.