Inflation worries return to fuel a surge in price of the precious metal
How the 2020 gold rush smashed through records
August 8 2020
Nine years after the last rally collapsed, a new gold rush is in full swing.
This week, prices rocketed to record highs above $2,000 per troy ounce for the first time — a 36 per cent ascent in the year so far that far outstrips any stocks index.
Even with prices at these lofty nominal levels, few are calling for a drop, prompting some to warn of a bubble and stunning even veterans of the industry.
"I've been active in the gold market for 35 years, and this is probably the most abrupt shift I've seen," said John Reade, chief market strategist at the World Gold Council and a former gold trader.
Much of the latest rally stems from central banks' efforts to shield the global economy from the worst effects of the coronavirus pandemic. Interest rates in major economies, which had started to pick up after the last financial crisis, have now headed back close to zero. That, plus central banks' aggressive bond-buying programmes, has crushed the returns available to buy-and-hold investors in government debt and left little further room for price appreciation.
