Gold hit its highest price ever this week, but observers say it’s what lies ahead that’s most interesting
Gold has dominated headlines this week after the precious metal surged to its highest ever price — US$2,135 per ounce — for a brief period on Dec. 3, but observers will tell you they are more interested in the days ahead as opposed to the record itself.
“I am not getting into something that happened in 90 seconds,” said David Rosenberg, an economist and founder of the firm Rosenberg Research & Associates Inc., referring to the record-setting price. “It was nothing fundamental and nothing worth talking about. What’s more important is the direction for the gold price from here now that we are flirting with the all-time high.”
Peter Grosskopf, head of the financial advisory firm SCP Resource Finance LP, said it’s “very difficult” to predict gold prices on a weekly or daily basis. He credited the “big rise” and the “big selloff” that followed this week to “technical trading.” But he added the ongoing positive trend for gold is “undeniable” and something he expects to continue.
Rosenberg and Grosskopf’s interest in the long term is understandable since gold has been on the rise for a while. Just last year, the cumulative average price for the yellow metal was about US$1,800 per ounce. This year, that average is expected to reach US$1,950. In 2019, it was about US$1,392, reflecting a 40 per cent increase in four years.
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