Since the latest round of escalation between Washington and Beijing, Wall St. had been sitting in an ordeal of a gold rush, as market participants were propelling the precious metal’s price to new loftiness. Besides thus far the gold futures had been the best investment this year, returning nearly 27 per cent since January 1, over three-fold than the returns of the US bond fund and roughly 1 per cent above the high-flying US stocks.
In factuality, after surpassing $1,800 an ounce back in the 2011s, it took nearly a decade for the precious metal to overtake the level as gold futures had wrapped up Monday market to an all-time high record closure of $1,931 an ounce after briefly climbing to $1,941.90 an ounce in mid-day US trading.
Last but not least, analysts of the Bank of American Merrill Lynch said on Tuesday that the gold futures could be headed towards $3,000 an ounce.
Pandemic, Sino-US tension, Dollar weakness, low interest rates & a widening budget deficit brick the wall of worry
Meanwhile, as several contemptuous factors were pushing the gold futures’ prices higher, investors’ angsts over the global pandemic outbreak’s ultimate impact on the economy grew louder than ever, while uncertainties had weaved further over the outcome of the November 3 2020 US Presidential election, instigating the investors to bet heavily on gold futures.
Aside from that, referring to a raft of worrisome aspects that had been stepping up investors’ appetite to hedge their bets on gold futures, a Chief investment strategist at CFRA, Sam Stovall was quoted saying on Tuesday’s commodity market closure that the sweeping rebound of the US stocks since hitting their lows on mid-March, the equity market appeared more expensive than they should, which in effect had proffered another reason to the investors to help gold look more attractive even as the stocks continued to rally.
After gaining as much as 2.16 per cent in Monday to breach its all-time highs on record, gold futures wrapped up Tuesday’s market 0.86 per cent higher to $1,958.04 an ounce following briefly hitting a session high of $1,981.06.