Gold soars towards 8-year high as coronavirus cases jump

“Gold surged to its highest in nearly eight years on Wednesday as rising coronavirus cases globally dented hopes of a rapid economic recovery and pushed investors towards safe haven assets.

Spot gold prices climbed 0.6% to $1,777.53 per ounce, having earlier hit their highest since October 2012 at $1,779.06. U.S. gold futures gained 0.7% to $1,794.60.

‘Everybody is worried about a second wave of the coronavirus not only in the U.S., but in Latin America, Brazil and Russia, so that’s supporting the rally,’ said Jigar Trivedi, commodities analyst at Mumbai broker Anand Rathi Shares. ‘People are expecting stimulus packages from central banks and higher the stimulus, better the prospects for gold.’

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Kitco/Neils Christensen

$2,000 gold in 2021 is a conservative estimate – MKS PAMP Group

gold bars“Unprecedented economic conditions caused by the COVID-19 pandemic will continue to support gold and silver prices at least through the first half of 2021, according to the latest research from Swiss refiner MKS PAMP Group.

In its latest forecast the analysts at the precious metals firm said that since their initial price forecast at the start of the year, the world has seen massive central bank action to support the global economy devastated by the coronavirus. They note that since March more than $15 trillion has been pumped into financial markets.

‘This is unprecedented and will have a long-term impact on the world economies,’ the analysts said. ‘Over the medium term, this massive influx of capital could result in inflationary pressure and a loss of purchasing power, in a negative global growth and negative interest rates context.’

In this environment, the analysts said they see gold prices pushing through $2,000 an ounce by the first half of 2021 as economic uncertainty and low interest rates continue to support prices.

‘Despite a significant price increase in our forecast, we believe our scenario to remain conservative,’ the analysts said. ‘As paper money loses value and markets remain volatile, gold shall face a significant influx of buying interest, and play its role as a safe haven and capital preservation asset. It is a perfect storm for gold or even a perfect hurricane!’”

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Marketwatch/ Andrea Riquier

COVID-19 undid 3 years of economic progress in China. Don’t expect a quick rebound, these experts say

family gathered wearing masks“A quick return to economic normalcy after the body blow of the coronavirus pandemic isn’t in the cards, if China is any indicator, Leland Miller says.

Miller is CEO of the China Beige Book, which attempts to provide a peek into the notoriously veiled economy. Right now, that view is grim.

China Beige Book’s just-released second-quarter report shows ‘an economy still mired in deep recession,’ its analysts noted. Even more problematic, Miller said in an interview, it implies that the government of the world’s second-largest economy is willing to walk back steps toward a more progressive economic model in order to claw out of the deep recession created by the virus that was first identified there in December.

The firm, which uses survey data from over 3,300 Chinese companies and 160 bankers in 34 industries across the country as source material, reports that most measures of business activity are ‘down massively’ compared with a year ago, even if the second quarter shows a modicum of improvement over the previous three-month period.”

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Kitco/Anna Golubova
Russia ramped up gold production right before COVID-19 hit

russia ramped up gold production“Prior to the coronavirus paralyzing the world, Russia was ramping up its gold production, according to the Union of Gold Producers of Russia.

Russia’s total gold output reached more than 64 metric tons in Q1, which is up 5.11% from the same period last year, the union said.

‘The coronavirus pandemic did not impact Russian gold mining companies’ production performance during the first three months of 2020. On the contrary, the results of the first quarter (Q1) maintained the trend of 2019, when Russia reached its record high in gold output,’ says the union’s chairman Sergey Kashuba.

Total gold mined, excluding recycled gold, was up 4.6%, reaching more than 48 tons in Q1, the union added.

After March, however, gold production saw problems due to COVID-19 shutdowns.”

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