Press Release: Gold Prices on the Rise as Investors Seek Safe Haven

Press Release: Gold Prices on the Rise as Investors Seek Safe Haven

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In a recent post discussing how stocks and bitcoin falls while gold rises as half of Europe starts opening up, it appears that gold is on a strong bull run even as bitcoin and stocks are going down in value. In line with this, the price of gold has recently risen to its highest value in seven years. According to Avtar Sandu, a senior commodities manager at Phillip Futures, “Gold as a safe-haven has gained traction as currencies are being devalued by massive stimulus programs. This has also increased physical demand of gold (such as ETFs) to hedge against the debasement of fiat currencies.” When it comes to trading commodities like gold, getting alerts on price movements and keeping track of traders’ sentiments are key to having full control over your accounts and mitigating risk. With that in mind, here’s an overview of gold markets around the globe:

Around the world, several countries and central banks are implementing fiscal policies to support their economies during this time. The Federal Reserve announced a $2.3 trillion stimulus package, while European Union finance ministers are providing 1.5 trillion euros to boost the economy. Michael McCarthy, chief strategist at CMC Markets explains that “The concerns about the economic outlook are particularly supportive for gold. Liquidity (from the Federal Reserve) combined with the background of lower interest rates makes gold a much more attractive proposition.” However, there could also be slight reductions in value as investors and traders find new positions. Reflecting the worldwide sentiment for gold, holdings in SPDR Gold Trust, which is the world’s largest gold-backed exchange-traded fund, rose 1.6% to 1,009.70 tonnes on April 13, the highest since June 2013.

Historically speaking, the excess liquidity in various markets tends to result in rising gold prices. Generally, figures suggest that as the money supply rose from the same period a year earlier, gold prices also rose. In addition to this, gold-backed ETFs hit a new all-time record in the first quarter of 2020, resulting in net inflows of $23 billion, for a total of more than $164 billion, according to a report by the World Gold Council (WGC). The WGC explains how with the Federal Reserve’s current zero-interest policy, gold has the potential to do well because it tends to perform well during easing cycles. Furthermore, the uncertain market outlook is contributing to the positive performance of gold, especially during periods of inflation.

Due to the rising demand for gold along with supply and production disruptions across the world, there been a shortage of small gold bars for consumers. While there is plenty of gold in banks and trading hubs, they typically use larger bars that are impractical to buy for the regular customer. Because of this, some dealers have resorted to contacting previous clients to check if they are willing to sell any of their gold, offering them a premium above market price. Currently, people are in the market to buy, not sell gold. For every one or two sellers, there is a massive quantity of buyers in search of small gold bars and coins. In the foreseeable future, it is likely that the value of gold will continue to hold steady.

This is a press release. Trustnodes has not undertaken any verification of any of the above statements and any statement or project contained therein is not necessarily endorsed by Trustnodes. Readers are strongly urged to do your own research.

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