Gold Price Smashes Past $2000
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Gold has surpassed another major hurdle reaching $2,000 per ounce! This never-before-reached $2,000-an-ounce mark is a significant psychological resistance level, with gold’s 49-year trend channel resting just below it at $1,983.
Fuelling bullion's upward path has been economic and political uncertainty underpinned by the coronavirus pandemic and the response by central banks -- to slash interest rates and flood markets with cash. The slide in the rival safe-haven dollar was the tipping point for gold's latest surge, with the greenback plunging to a two-year low. This backdrop is enhancing demand for the yellow metal.
“Bullion has surged more than 30% so far this year to a record high and is one of the best-performing assets in 2020 as a result of increased safe-haven demand during these uncertain economic times. To some degree, gold replaces the USD,"
says Alan Demby, Chairman of The South African Gold Coin Exchange and The Scoin Shops.
However, because the rally has been so rapid, a downward correction is likely and could be brutal, before the market attempts another stab higher. Demby adds “ The rally was on solid ground, but I’m mindful of a correction given its pace.
The speed of the upswing should sound a warning bell ... as this can often precede a correction. I believe the outlook for gold remains constructive and I see a continued improving volatility backdrop, so there’s no sign that the long-term trend is changing,”
It has often been said that the wisest and soundest people avoid speculation. Demby agrees with that sentiment and endorses a consistent accumulation of gold coins, as gold is a hard asset which over a long period, keeps its value. A knee-jerk reaction to global uncertainty is not the reason to start your gold coin collection; rather, gold coins should be a sustained investment strategy. Gold is not for selling but for keeping. Illustrating this view, when Demby took over The South African Gold Coin Exchange in 1972, gold was trading at $300 per oz. Today all records have been smashed with the gold price blasting through the $2000 to mark a fresh record high. Demby concludes,