Gold price hits record high on new fears for the economy

Gold is flying hitting an all-time high of $1,944.71 well above its previous record of $1,921.18 seen in 2011

Gold is flying hitting an all-time high of $1,944.71 well above its previous record of $1,921.18 seen in 2011

The price of gold has surged to a record 1,926.20 US dollars (£1,502.44) per ounce as investors moved money into an asset seen as a safe haven amid jitters about US-Chinese tensions and the recovery from the coronavirus pandemic.

Shanghai was slightly higher, having suffered big losses last week as China and the USA closed consulates in Chengdu and Houston, ramping up tensions between the superpowers.

Analysts said 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.

The latest increase in gold prices also came as diplomatic tensions between the USA and China are rising.

Since gold is priced in the US currency, it actually gets more affordable for worldwide investors when the dollar declines.

Mr Ash says his customers can though take their metal out from the vault if they wish: "We would arrange delivery, most usually in the form of smaller bars, although that necessarily triggers the extra manufacturing and shipping costs you otherwise avoid by owning wholesale bullion inside secure storage".

The technical outlook for the price of gold remains constructive as it trades to fresh yearly highs during every single month so far in 2020, with the bullish behavior also taking shape in July as precious metal tags a new 2020 high ($1898).

The meeting may be a platform for a strong message that change is coming, opening up the possibility for more unconventional policies further down the line, according to Chris Weston, head of research at Pepperstone Group in Melbourne. "We think these factors, in combination with limited supply growth as miners continue to restrain capital spending, will drive gold prices higher", Haefele said.

Increasing concerns about the virus pandemic as well as deteriorating relations between the US and China add to gold's allure, and most analysts are bullish on the metal's outlook.

The euro gained 0.3 percent to $1.1693, hitting a 22-month high of $1.16590 as sentiment on the common currency improved after European leaders reached a deal on a recovery fund in a major step towards more fiscal cooperation. Shares fluctuated in Japan, Hong Kong and Australia, while United States and European futures climbed after last week's declines.

Silver too joined the rally, jumping 4.5 per cent to its highest since September 2013 at $23.86 per ounce.

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