Gold has long been considered a safe haven asset in times of economic uncertainty, and this May has seen a significant rise in the price of gold. The precious metal has been pushed higher by a number of factors, including a weaker US dollar, concerns about the impact of the COVID-19 pandemic on the global economy, and a push for safe haven assets by investors.
The average price for gold in May 2020 was $ 1,718.31 an ounce. The lowest was $ 1,685.88 an ounce while the highest was $ 1,747.68 an ounce. Average gold price in 2020 was $1,773.73.
The US dollar has been weaker in recent weeks, which has had a positive effect on the price of gold. The Federal Reserve has made it clear that interest rates will remain low through 2022, which has helped to keep the dollar down. As most investors know, the value of gold and the value of the US dollar tend to move inversely to each other, meaning that when one is up, the other is typically down.
Could the deflation affect the gold price on the short term?
The COVID-19 pandemic has also had a significant impact on the gold market. As the number of new cases in the US has surged in May, reaching levels not seen since early May, investors have become increasingly concerned about the future of the US economy. The uncertainty surrounding the virus has led many to seek refuge in safe haven assets like gold. Gold markets have broken higher during the week. Ultimately, this is a market that should continue to see a lot of volatility as global events dictate.
Gold has also been boosted by a general easing back of stock markets.
After the initial recovery from the March lows, stock markets have been trading more cautiously, which has led many investors to turn to gold as a more stable option. Up trend is broken Gold Down to 1660.00. The deep of March is not a normal oscillation and it will repeat soon, we are in an extreme situation right now and you have to consider the macroeconomics conditions involved in a pandemic global economy slow down and a debt crisis set to go on fire with tens of millions of unemployed peoples unable to pay back debts.
The price of gold hit a seven-year high in May, reaching levels not seen since 2013. This has been a solid performance for the precious metal, which has seen growth of around 15% so far this year. While it is unlikely that the same rate of growth will be sustained over the next six months, there are still opportunities for investors to benefit from the ongoing strength of the gold market.
In conclusion, the price of gold has been on the rise in May 2020, driven by a number of factors including a weaker US dollar, concerns about the impact of the COVID-19 pandemic on the global economy, and a push for safe haven assets by investors. While it is unclear what the future holds for the gold market, the current conditions make it an attractive option for those seeking stability in an uncertain world.