fbpx
Edit Content

Gold Prices Hits $1,800, The Highest Level Since 2011

Gold price

The price of Gold is now above the $1,800 an ounce mark – it’s the highest level since September 2011. Gold has soared nearly 19% so far in 2020 and it is creeping toward that record high of more than $1,900.

Recall, that the 2008 Lehman Brothers bankruptcy led to an initial dip. However, gold rallied as the market melted down later that year and into early 2009. Moreover, 2011 gold prices hit its all-time high after Standard & Poor’s downgraded the United States’ credit rating, amid market jitters about Europe’s sovereign debt crisis. 

The bull market of the metal is against the backdrop of the dwindling state of the global economy, which was caused by the COVID-19 pandemic. However, the rise in gold price earlier this year is quite understandable, since gold often tends to do well in times of financial stress, when fear is prevalent and uncertainty hits the market. 

Start Your Business in 30 Days Even If You Don't Have An Idea
Start Your Business in 30 Days Even If You Don’t Have An Idea

Market uncertainty has made a lot of institutional investors to hedge their funds with some gold assets. The metal is now seen as a safe haven because the coronavirus pandemic has seriously undermined global economic growth, thereby encouraging sustained inflows into gold-backed ETFs.

According to the Chief Precious Metals Analyst at HSBC Securities, James Steel, “A massive investor response to Covid-19 has pushed ETF holdings to record levels, the impact of which has outweighed the decline in jewelry demand and absorbed increases in recycling. Further inflows are expected as investors respond to elevated risks and low yields.” 

Furthermore, according to HSBC’s Steel, ‘’The near-unprecedented fiscal and monetary peacetime response to Covid-19 supplies gold with two substantial bullish inputs: liquidity and debt. Low-interest rates, monetary accommodation including balance-sheet expansion, and heavy fiscal spending globally for the foreseeable future will cement and extend gold’s rally.” 

Are Investors Using Gold As A Hedge Fund?

Despite a huge rally in big tech stocks and the broader market, investors have continued to flock to gold. The big question is – are some investors hedging their bets? Maybe buying gold could be a good hedge against a potential stock market pullback if the rebound in earnings and the economy doesn’t materialize in 2021 as expected.

However, putting this in perspective will be based on Goldman Sachs’ prediction of the metal possibly reaching a record $2,000 in the next 12 months as bullion prices and holdings are widely expected to extend gains.

For the purpose of investment, do you think the commodities market is bullish enough to hedge your bets?

Leave hear your thoughts in the comment. 

Let’s create visibility for your brand today and put your business on the world map. Contact us today to make your brand the preferred choice among our audience of entrepreneurs and business leaders.

Share:

Facebook
Twitter
LinkedIn

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Join Entrepreneurs Family

No spam, only business insights and tips. 

Entrepreneurs Sign Up

Business Registration

Most Popular

Join Entrepreneurs Family

No spam, only business insights and tips. 

Entrepreneurs Sign Up

Related Posts

How to Start a Business With No Money

How to Start a Business With No Money

How do you start a business with no money? The myth is as old as commerce itself: to make money, you must first have money. But in the digital age, this old adage is being turned on its head. The truth is, the landscape of business startups has radically shifted;

Subscription business model

How to Build a Successful Subscription Business Model

The subscription business model is reshaping the way we think about buying and selling. In the past, we’d pay once for a product or service and that was the end of the transaction. Today, we’re seeing a shift towards a model where customers pay on a regular basis — like

Scroll to Top

Join Entrepreneurs Family!

Get access to FREE business insights and funding opportunities daily.

Entrepreneurs Sign Up