Gold Prices  – A Timeline of Events

The price of gold has been in sharp focus over the course of the last 18 months or so, having soared during the peak of the coronavirus pandemic and endured a sustained decline as the global economy embarked on a recovery this year.

 

Of course, gold has enjoyed a sustained rally of late, thanks to a slew of supportive data releases. According to Edward Moya from the Oanda trading broker, the gold price recently increased to $1,882.87 (from a low of $1,699.08 on March 4th), following disappointing economic data and a significant reduction in risk appetite amongst investors.

 

We’ll chart the recent price of gold in further detail below, while also looking at historical trends and their potential impact. 

 

Highs and Lows – The Gold Price Through 2020

 

There’s no doubt that the demand for gold began to soar at the height of the coronavirus pandemic, particularly as the global stock market recorded losses and national currencies were devalued by quantitative easing measures.

 

As a result of this, the gold price achieved a record high in August 2020, peaking at $2,036.58 following a sustained period of rising Covid cases and national lockdowns.

 

Given the global economic uncertainty that remained at this time, many economists predicted that the price of gold would continue to rise and ultimately break through the $2,500 level. The market contrived to defy such forecasts, however, with the price of gold falling incrementally to just $1,786.89 in November.

 

A brief rally followed, but Q1 of this year saw more sustained losses as the IMF announced upgraded growth forecasts for 2021 and 2022. Finally, the price of gold slumped below the $1,700 mark to $1,699.08 at the beginning of March, although once again this has been followed by incremental gains through May.

 

Ultimately, this gradual decline has been underpinned by a rise in the 10-year US Treasury yield, which is also being fuelled by a potential hike in inflation across the globe.

 

How had Gold Fared Previously?

 

Of course, gold’s next challenge is to recapture the $2,000 level, which is well above the threshold that tends to open the floodgates for momentum traders.

 

Aside from this, however, a quick glance at two-year gold prices highlights the sustained growth of the asset class, which was actually valued at $1,297.30 on May 29th, 2018. Interestingly, the price fell further to $1,175.29 on August 7th, and it has largely embarked on an upward trend ever since this date.

 

Even if you account for the small price corrections that have occurred since May, 2018, the value of gold has increased significantly over the course of the last two years. 

 

This not only reinforces the relatively reliability of gold as a secure and valuable store of wealth, but it also underlines its enduring potential as a safe-haven asset.

 

To this end, it also remains an outstanding asset for those looking to diversify their portfolio, particularly in an uncertain economic climate that continues to face challenges despite its recent growth. 

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