Gold prices hit a shocking $2,000 per ounce for 1st time ever on Tuesday.
The gold price has surged 30% this year to an all-time peak of around $1,975 an ounce and is one of 2020’s best-performing assets.
The rally was driven by a belief that gold will hold its value better than other assets as fallout from COVID-19 ripples through the global economy.
The central bank stimulus has pushed inflation-adjusted U.S. bond yields to record lows, making non-yielding gold more attractive, while the dollar has weakened sharply, making bullion cheaper for buyers with other currencies.
The never-before-reached $2,000-an-ounce mark is a major psychological resistance level, with gold’s 49-year trend channel resting just below it at $1,983, said Commerzbank technical analyst Karen Jones.
Because gold’s rally has been so fast, a downward correction is likely and could be brutal, analyst further said, before the market attempts another stab higher.
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