Gold rips up record book as US$2,000 test looms in hunt for haven – by Ranjeetha Pakiam, Justina Vasquez and Elena Mazneva (Bloomberg News – July 27, 2020)

Gold’s unrelenting march higher shows no signs of slowing after a plunge in the U.S. dollar swept prices past the previous high set in 2011 and put the metal on track for even bigger gains.

Bullion’s surge came as a gauge of the U.S. currency sank to the lowest in more than a year, the latest in a long line of bullish factors — including negative real rates in the U.S. and bets the Federal Reserve will keep policy accommodative when it meets this week — that are pushing prices ever higher.

With the world facing an extended period of unprecedented economic and political turmoil, gold’s now got US$2,000 in its sights. Some in the market suggest the haven could rise even beyond that.

Nascent signs of gold’s record-breaking ascent began to show in mid-2019, when the Fed signaled a readiness to cut interest rates as uncertainty — primarily about the impact of the U.S.’s trade battles — clouded its outlook.

The rally gathered pace in early 2020 as geopolitical tensions rose and the coronavirus outbreak hurt growth worldwide, pushing governments and central banks to unleash vast amounts of stimulus, and sending real rates slumping further into negative territory.

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