A successful test for coronavirus vaccine and the 2020 US presidential election are forecast to frightfully fluctuate gold prices across the globe.
|The appearance of coronavirus vaccine could hamper the rise of gold price |
Last week was the first time the gold price exceeded $2,000 per ounce, fuelled by COVID-19 and the US-China trade war. CNBC quoted Frank Holmes, CEO of US Global Investors as saying that the price can reach $4,000 per ounce in the next three years.
According to bullionbypost.co.uk, the global gold price is currently $1,925.69 per ounce. After the peak last week, the price tends to fall. Over August 12, the price dropped by $104.68 per ounce or 5 per cent.
Accordingly, the US administration has poured trillions of US dollars into rescuing the economy that sent the USD tumbling.
“We’ve not seen this level where central banks are printing money at a zero-interest rate. At zero interest rate, gold becomes a very, very attractive asset class,” Holmes said.
On the other hand, investment strategist Yung-yu Ma at BMO Wealth Management pointed out that two factors could impact the direction of price moves: the development of a coronavirus vaccine and the US presidential election in November.
“The vaccine has the potential to shift some of those positive factors that are working right now in the favour of gold,” Ma said.
Regarding the election, analysts said that the gold price will wildly fluctuate as soon as the results are published. According to the New York-headquartered market research company Third Bridge Group, prices could nosedive below $1,600 per ounce after the election, before reviving in the next year.
However, financial data provider Refinitiv figured that the political upheavals in the US could interrupt the financial market, boosting gold prices.
“The elections are now less than 100 days away and Trump has recently suggested delaying it, raising concerns he will seek to circumvent voting in a contest where he currently trails his opponent by double-digits,” wrote Refinitiv’s Cameron Alexander, manager of precious metals research.
Four years ago, right after Donald Trump won over Hillary Clinton, investors fled to gold, pushing the price up by 5 per cent.
|On August 11, Russian president Vladimir Putin announced that the nation's first coronavirus vaccine has been approved for use and mass production will begin shortly. Previously, the country announced to have finished all cilinical tests for the vaccine. |