December gold futures are trading at $1971.40 currently. It is a net increase of $16 on the day. Taking in mind the pace at which the yellow metal price is moving up, analysts think that $2,000 per ounce could become a reality shortly.
Since March, the yellow metal has gained around $500 in value. Moreover, in July, the precious metal went steeply upside. Only from the middle of July till today, gold futures have increased around $150.
It only took gold 4 years, to take from $1045 in November 2015 to $1,500 in August, 2019. It shows how fast gold prices have seen gains.
The real question now is not what this rise means for the future gold rates, but how much higher the precious metal prices could go.
Over the past few weeks, precious metal prices have broken a series of records. Rising coronavirus cases globally and tension between the world’s two most significant economies are fueling gold prices. Usually, any sign of uncertainty in the world economy boosts the appeal of the yellow metal. Investors rushing away from riskier assets find a haven in gold.
Ravindra Rao, VP-head commodity research, Kotak Securities, stated that the yellow metal keeps holding above the $1.900 level. It shows that momentum is still positive.
The Federal Reserve’s pacifist stance has been factored in. So, unless there is some shock, the metal could see some correction, Rao said.
The Federal Reserve added $3 trillion to their balance sheets through buying of mortgage-backed securities, US treasuries, and corporate bonds. The longer the US government is forced to allocate large aid the more it is expected that we will see gold pricing continue to increase.
Market technicians believe the current rally could easily exceed $2.000 per ounce. The precious metal is most likely to touch $2.100 or even higher.