The gold price breaks a new record

The price of gold broke a new historical record on Tuesday in Asia, after the day before, before erasing its profits. A phenomenon that can be explained in particular by the decline in the dollar, the measures to support the US economy and the uncertainties associated with the Covid-19 pandemic.

The price of gold on Tuesday, July 28, in Asia broke a new historical record that erased the day before and still favored its status as a safe haven in times of crisis and weak dollars.

The price of one gram of gold rose to $ 1,981.27 on Tuesday morning during trading in Asia, beyond its peak the day before, which reached $ 1,945.72. The latter had already set an absolute record and erased the previous one, all the way back to 2011.

On Tuesday around 9 GMT (11 am in Paris) gold then fell back to around $ 1,942 per gram, showing a fall of 0.74%.

“Investors hope gold price continues to rise”

The crisis and the great uncertainties associated with the pandemic, the central bank’s policies that are still lowering bond yields and the weakness of the dollar are currently benefiting this safe haven. The price of the yellow metal has therefore been estimated at more than 25% since the beginning of the year.

“With an extremely accommodating monetary policy around the world and central banks with high cash pressures, investors hope that the price of gold will continue to rise,” said Naeem Aslam, an analyst at Avatrade. .

Favorable monetary policy

Central banks have indeed injected unparalleled amounts of liquidity into the economy in order to alleviate the economic crisis caused by measures to combat the pandemic.

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Because the gold market is denominated in dollars, a decline in the US dollar makes bullion cheaper for buyers who use other currencies.

However, the greenback has weakened markedly in recent months due to the impact of the huge monetary relief policy of the US Federal Reserve (Fed) set up to support the US economy shaken by the coronavirus.

In addition to monetary policy, gold has been “supported by rising geopolitical tensions between the United States and China,” concludes analyst Naeem Aslam.

With AFP