Gold price soaring – insurance in times of crisis

The price of gold is racing from record to record. After almost nine years, the price of the precious metal has exceeded the mark of 2,000 points and is a record high of 2039.24 dollars per troy ounce (31 grams). Stockbrokers do not see the end of the flagpole being reached: “Thanks to the nervousness of investors and the weak US dollar, there is no end in sight to the rally soon,” said Milan Cutkovic, market analyst at the brokerage firm AxiTrader. The precious metal is regarded as a brilliant insurance in times of crisis. The most recent economic figures in Europe and the United States have shown how badly the economy collapsed during the lockdown to contain the coronavirus pandemic.

The Collapse
The gross domestic product of the Eurozone collapsed in the crisis quarter from April to June by 12.1 percent. In the USA, GDP fell by around a third in the second quarter, projected over the year – a historic economic slump. The current environment has the potential to drive the gold price up further, said expert Hans-Günter Ritter from the precious metal dealer Heraeus. “To a certain extent, gold replaces the US dollar, which typically benefits during a crisis.” Because investor confidence in the greenback has declined. The dollar index, which reflects the exchange rate against major currencies, had recently fallen to a two-year low.