The yellow metal feels confident amid sagging oil and a slowdown in global financial markets, justifying the status of a safe haven asset. The cost of precious metals surged at the beginning of the week, although experts are confident that it is unlikely for it to stay in high positions for a long time.
The yellow metal was trading above $1,700 per ounce on Monday, March 9, surpassing 7-year highs. Experts explain the rapid rise in precious metals by the total spread of the coronavirus COVID-19 and the deafening collapse of oil prices.
Recall that black gold prices dipped 30% after Saudi Arabia announced plans to dramatically increase oil production, and OPEC+ countries could not agree to reduce the volume of raw materials.
According to experts, the key factors supporting the gold market are negative interest rates, increased market risks, aggravation of crisis phenomena in the world economy and the raging epidemic of coronavirus COVID-19. Many experts are certain that the yellow metal is the only reliable refuge of investors, which is not afraid of any cataclysms.
The sharp rise in the price of precious metals forced many analysts to reconsider their previous forecasts. Many of them expect further gold growth up to $1900– $2000 per ounce. However, the currency strategists of a number of large banks believe that the precious metal will not hold at $1,700 or more, but will slightly fall back from these levels. This forecast was confirmed on Tuesday, March 10. Gold is currently trading near $1,659– $1,660 per ounce.
Most analysts expect a slight decrease in the cost of precious metals in the near future. However, in the long run, gold will be able to regain its lost positions and strengthen them, experts said. The yellow metal is one of the most liquid assets and the most preferred for investors, especially during periods of political and economic crises. A number of currency strategists are awaiting its sale to compensate for losses on oil, stocks and other financial instruments.
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