While European shares opened lower amid a soaring COVID-19 caseload and failing hopes of for a swift global economic rebound, gold continued its surge, rapidly approaching its September 2011 all-time high.
Against a backdrop of surging COVID-19 cases worldwide and economic uncertainties triggered by the health crisis threatening to send consumer spending plummeting and wipe out job gains, gold soared to $1,800 an ounce on 8 July.
By 0854 GMT, the price of spot gold had risen by 0.3 percent to $1,799.22 per ounce after briefly hitting its highest since November 2011, at $1,800.18, earlier in the session.
US gold futures rose by 0.2 percent to $1,812.90 per ounce.
Market analysts claim bullion is poised to potentially breach $1,850 and revisit its all-time high above $1,900 as economic fallout from the pandemic has investors dodging riskier assets in favour of safe havens.
As appeal for the precious metal reflects in gold-backed exchange traded funds adding 104 tonnes of bullion worth $5.6 billion in June, according to information from the World Gold Council said on Tuesday, traders underscore the capricious nature of gold as one of the most liquid commodity markets.
A $100 price gap, warn experts, can swiftly be closed in a day or two under varying circumstances, with gains either accrued or lost just as quickly.
Nonetheless, many trading houses predict lofty targets for gold prices beyond the $1,800 mark.
Citigroup analyst forecast a three-month rise to $1,825 per ounce, from a prediction for $1,715 for the second half of 2020 published at the end of May, with next year’s target set at $2,000, reports Investing.com. Goldman Sachs similarly forecasts gold reaching $2,000 overtime.
In more remarkable predictions, independent analyst Dan Popescu was quoted as believing gold had the capacity to reach $5,000 in the next five years.
The optimistic forecasts are supported by current market variables favouring gold.
Anuj Gupta, deputy vice president of commodity and currency research at Angel Broking in India, supported the notion that gold prices, currently close to their annual record, won’t “run out of steam”.