Gold had a remarkable performance in the first half of 2020, increasing by around 25 percent from its low in March and significantly outperforming all other asset classes. Going into the second half of 2020, Gold is still having a remarkable performance increasing by 9.2% till now, reaching a trading price of US$1888.46/oz.
Gold futures prices soared to a nine-year high on Thursday’s session, getting a boost from a host of factors such as the weak the US dollar, additional stimulus measures, robust investor inflows, rising coronavirus cases and US-China tensions.
U.S. - China Tensions Support Gold Price
The U.S.-China tensions escalated further yesterday when the U.S. ordered China to close its consulate in Houston, marking a further climb in tensions between the two countries and sparking demand for haven assets.
Wang Wenbin, a spokesman for China's Foreign Ministry, said China was notified Tuesday that it would have to close the consulate within 72 hours. He described the action as an "unprecedented escalation" and said China would "react with firm countermeasures" if the United States does not revoke the decision.
Why is gold going up and up?
Analysts are bullish as the fundamental factors like a high level of uncertainty surrounding the Covid-19 pandemic, lower interest rates, the enormous amount of liquidity and stimulus programs have increased the appetite for gold.
Citibank expects the spot gold prices to breach the record high over the next 6-9 months. Citibank isn’t the only major Wall Street bank that holds a bullish view on bullion. Goldman Sachs also expects that the spot gold price is going to challenge its previous all-time high.