Gold Records New High as the US Dollar Weakens
Friday, August 19, 2021 3:33 PM

Gold prices catapulted to a new record Friday on the back of a weak US dollar and as fears of global double-dip recession sent investors pilling into the safe-haven metal. Gold for December jumped $30.20 to close at $1,852.20 per ounce at the Comex division of the New York Mercantile Exchange, although settled well off session highs. According to Kitco’s gold index, the gold price has traded as high as $1,881.40 and as low as $1,824.50 whilethe spot gold price was adding $25. Gold prices have risen more than 6 percent in just a week as investors gobbled up the metal as protection against slowing global growth from China to Germany to the US. Gold have ended July 2011 trading at $1,631.20 per ounce.

Matt Zeman, head trader and strategist at Kingsview Financial, said, “We could hit $2,000 as early as next week sometime at this rate, certainly in the next weeks. It is starting to look a little bit bubbly.” He states that the fast rise in gold price has been of some concern and could end with a selloff that would shave $200 to $100 off current prices, although underlying fundamentals for the metal are favorable.

Supporting precious metals, the dollar was languishing near a three-year low against a basket of currencies. Analysts state that the dollar is taking a bit of beating right now and in the absence of macroeconomic headlines Friday, gold took its cues from the lower dollar and slump in oil prices. The dollar index that compares the US currency to six others stood at 73,943, down from 74, 216 late Thursday.

Rozanna Wozinak, head of investment research at the World Gold Council, states that the apparent shakiness of the dollar’s status as the world’s reserve currency should keep gold prices heading upwards. Analysts state that investors have been shifting their money into gold because it shares an inverse relationship with dollar, which is struggling to pare losses at present. Gold and dollar generally trend in opposite directions.