Gold rose over 4.5% last week, approaching all-time highs in both spot prices and continuous futures contracts (see the following charts). This was gold’s seventh consecutive weekly increase, its best streak since 2011.
Several factors support a continued bull run for gold: The coronavirus continues to spread at a time when many had hoped it might be receding, the White House and Congress are hammering out another pandemic stimulus package with a potential price tag of $1 trillion, and the Federal Reserve is meeting next week to consider if additional accommodation is needed.
Bloomberg reports, “Gold may reach the all-time high by early next week, according to a trader at RJO Futures in Chicago.
“‘The pace of this thing is unbelievable,’ Bob Haberkorn, a senior market strategist at RJO, said by phone. ‘People just want to buy, buy, buy, they just want to be in—they don’t want to miss it. People are preparing for more money printing, lower dollar in the future and hedging. And there’s no yield on Treasuries right now, so gold is a safe spot given the circumstances of the central banks and the coronavirus.’”
Rick Andrews is president of Avant Capital Management.