New support: A worker polishes gold bullion bars at a refinery in Sydney. Demand for gold wearables appear to have collapsed in a number of key markets but there is new support coming from the likes of exchange-traded funds trading the price of gold. — AFP
GOLD has made a brief comeback in a low-yield world. It has drawn prominent hedge fund investors into gold supporters once again. Nine years after the last rally collapsed, a new gold rush appears again. This mid-August saw its price rocketed to record highs above US$2,000 per troy ounce – a 36% rise so far in the year that outstrips any stock index.
Veterans in the industry are being prompted to warn of a new bubble in the making. As I see it, much of this rally reflected central bank efforts to shield the global economy from adverse effects of the Covid-19 pandemic. Interest rates in the major economies, which had started to slowly pick-up after the last financial crisis, have now headed back close to zero. Frankly, gold buyers are already showing signs of fatigue.
Limited time offer:
Just RM5 per month.
