Gold hits 8-year high, strengthened by global recession sentiments

Gold climbed up significantly for the first time in more than seven years, pivoted by predictions that the worst global recession in history is here. It is expected that the recession will be characterized by prolonged massive stimulus packages by fiscal authorities, and investors plowing cash into Gold ETFs

Earlier today in London (11:53 am local time) Gold spot price was steady at $1,720.30 an ounce. It had previously ended trading at $1,726.97 on Tuesday, marking the highest close since November 2012. Gold futures contract soften to 0.7% after peaking at a seven-year high Tuesday.

Gold is seen as the ultimate hedge against too much debt and the massive amount of cash printed by global central banks with the aim of stimulating the global economy, expanding their balance sheets to support growth, and stabilizing the high uncertainty mood levels of investors caused by the COVID-19 pandemic.

Gold has so far gained 14% in 2020, supported by record holdings in gold ETFs as COVID-19 pitched world economies into recession and weakened investors’ appetite for risk.

Also note that gold bullion’s latest performance came even as world leaders prepare to soften the negative impact caused by the lockdowns, even as the pandemic shows no signs of slowing.

Gold spot prices surged also strengthened by the weakening of the dollar, which has plunged to near a one-month low.

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