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In this current situation, where the world is gripped by the coronavirus pandemic, and traders are investing in the protective assets, the role of gold is difficult to overestimate. Many experts believe that the peak of gold is behind us already.
According to analysts' observations, gold has now reached its highest value since the last 8 years, managing to pass $ 1,700 per 1 ounce bar, breaking previous records. Strategists from BNP Paribas say that the first quarter of 2020 was the best for the yellow metal, and they are afraid that gold will not be able to repeat this rise in the near future. They believe though that gold will break $ 1675 at least once a year.
Thus, experts at BNP Paribas adjusted their forecast for gold, expecting its average price to not exceed $ 1,610 per 1 ounce in the end of 2020. In 2021, they are confident that the situation of economies will stabilize and inflationary pressure will decrease, which will have a beneficial effect on the price of the precious metal. BNP Paribas expects gold to trade at $ 1,500 per 1 ounce next year.
The gold market is currently not going through the best of times. Although the yellow metal is still in demand and is steadily rising in price, the markets are experiencing an acute shortage of physical gold and bullion. The situation is not even saved by the fact that the largest gold processing plants have started to return to work.
Meanwhile, analysts drew attention to the explosive growth of transactions on the exchange of futures for physical metal (exchange-for-physical). They consider this as a sign of tightening market conditions. Such transactions allow traders to switch from "gold" futures to physical positions, and vice versa. At the moment, this balance is broken, as at the beginning of this week, gold futures soared by 2.9% to $ 1,742 per 1 ounce, which is the highest value since November 2012, while the price of gold on the spot market increased by 0.2 %, to $ 1,660 per 1 ounce.
According to experts, in the near future, gold will remain as the center of attraction for investors, due to the unrelenting demand for protective assets. Support for this demand will surge because of the fears about the impending recession. In addition, experts claim that gold will also benefit from the shortage of physical gold caused by the quarantine measures around the world.
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