Market Analysis

Gold near 7-year-high

Gold is shining with the spot price closing in on its 7-year-high at $1,700. Bullion rallied after the announcement of the Federal Reserve’s new coronavirus stimulus. Another $2.3 trillion of lending will be in the system to soften the impact of the pandemic emergency. As mentioned in previous comments, markets are understanding and pricing in every day that central banks will be forced to create a huge amount of new liquidity. The amount of cash in circulation is growing much quicker than the gold, which of course cannot be printed. Gold production is increasing the amount of gold in circulation by less than 2% per year, while the monetary mass is dramatically increasing week by week to mitigate against the impact of the virus.

Carlo Alberto De Casa – Chief analyst, ActivTrades


*The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication. All information has been prepared by ActivTrades PLC (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.