A powerful gold price rally has analysts expecting the yellow metal to reach $1,800 an ounce amid concern that the coronavirus pandemic will have a profound effect on the global economy.
Gold futures in New York moved closer to $1,800 an ounce, a level that was previously seen in 2011, according to Bloomberg.
The gold price rose to a new seven-year high of $1,740 per ounce on April 14, Reuters reported.
Gold, traditionally viewed as a safe haven in turbulent times, has soared in value as the global COVID-19 crisis has pushed economies toward recession.
The coronavirus has spread to 185 countries and regions globally, infecting more than 2.1 million people with more than 146,000 deaths, according to Johns Hopkins University.
In the U.S. alone, there are more than 671,000 cases and at least 32,600 deaths.
Hans Goetti, founder and chief executive officer of HG Research, expects gold to continue its rise.
“What’s happening here is that the Fed is expanding its balance sheet and every other central bank in the world is doing the same,” Goetti told Bloomberg TV.
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“What you’re looking at is massive currency debasement in the long term. That’s the major reason why gold is higher, and I would think that over the next few weeks or months, we’re probably going to retest the high that we saw in 2011,” he added.
Demand for gold tends to benefit from widespread stimulus from central banks as it is often seen as a hedge against inflation and currency debasement.
Goldman Sachs believes that the price of gold will reach $1,800 an ounce over the next 12 months.
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Some analysts expect the metal to surge even further before the end of the year. Fawad Razaqzada, a technical analyst at City Index, predicts that gold will hit a new all-time high of $2,000 an ounce in 2020.
The price per ounce of gold on April 17 was around $1,705.