Up 19% this year, gold has had a stellar run, recently cracking the $1,800 per-ounce level to scale nine-year peaks.
Several factors have driven the precious metal’s ascent, especially the safe-haven bid as the coronavirus wreaked havoc. As economies re-opened from May, retail buying helped accelerate the rally. Now focus is on gold as an inflation hedge.
With central banks and governments in full stimulus mode, inflation will be roused from its decade-long slumber, economists expect, though that’s a long-term rather than immediate possibility.
Between coronavirus risks and inflation expectations, speculators are taking no chances; positioning data indicates a market very long on gold. Prices will hit $2,000 within a year, Goldman Sachs predicts.