The gold price broke past US$2,000 on Tuesday, and experts took to social media with reactions — INN runs through a selection of them here.
The historic move came just a week after gold broke its previous all-time high of around US$1,920. Renewed trade tensions between the US and China, as well as a weakening US greenback, have contributed to gold’s price increase, which has now taken it as high as US$2,051.
Rising COVID-19 cases in the US and concerns that a global economic recovery will be prolonged are other factors in gold’s rise — the latest statement from the US Federal Reserve on July 29 has largely dispelled hopes of a quick economic turnaround.
“The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world,” reads the central bank’s statement.
“The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.”
The Fed’s dire words were reinforced on July 30, when data showed that the US economy contracted 9.5 percent during this year’s second quarter, the largest quartile decrease in 70 years. That was further compounded by new US jobless claims topping 1 million for the 19th straight week.
Experts take to social media as gold hits US$2,000
All of those factors (and more) led to gold’s rise above US$2,000, and unsurprisingly those following the metal were quick to share their takes on the situation on social media.
As Peter Schiff of Euro Pacific Capital explained, gold’s ascent into record territory comes at a cost.
While personally vindicating and financially rewarding, gold’s rise above $2K is not a cause for celebration. As #gold continues to set and break new records, rewarding all with the foresight to own it, remember that the move portends extreme economic hardship for most Americans.
— Peter Schiff (@PeterSchiff) August 4, 2020
According to the Bank of America (NYSE:BAC), governments around the globe have now announced US$20 trillion in stimulus initiatives, a number that is likely to grow as financial woes continue.
The price of #gold is now above $2,000 per ounce for the first time ever. For now, the significance of the dollar’s record low is lost on the vast majority of investors. But as thousand-dollar milestones fall like dominoes the gravity of the problem will be more widely apparent.
— Peter Schiff (@PeterSchiff) August 4, 2020
Peter Spina of GoldSeek and SilverSeek made a similar point, reminding investors to balance their excitement with the reality of the current situation.
Gold $2,000 is exciting but it is also indicating deeper monetary, financial, economic to global debt to geopolitical problems (among the many contributing factors).
These issues mostly ignored for decades, swept under the rug.
$2,000 gold is flashing warning signs!
— Peter ⚒ Spina (@goldseek) August 5, 2020
Ok, kids, let’s not be getting all cocky like. $Gold and $Silver should go a lot higher but there will be plenty of back and forth. At least I hope there will. I don’t want to see anything parabolic for a long, long time, thank you.
*Passes out paper bags to breathe into*
— Eric Coffin (@ericcoffin_HRA) July 27, 2020
Others were more excited — Jamie Keech of Resource Insider tweeted out the following message to his followers after gold passed the crucial US$2,000 mark.
— Jamie Keech (@Jamie_Keech) August 4, 2020
Chris Marcus of Arcadia Economics also had a positive reaction to the yellow metal’s milestone.
And we now live in a world with $2000 gold! pic.twitter.com/AWm7BIbrlo
— ArcadiaEconomic (@ArcadiaEconomic) August 4, 2020
During an interview just after gold passed US$2,000, David Morgan told INN that the market is on the cusp of the “biggest run in the metals.”
“The biggest move is in the third leg, which we’ve just entered. Gold proved it a couple of days ago — what you have to have is a new nominal high, which we had in gold, and now we’re getting that round number of US$2,000,” said the publisher of the Morgan Report.
Watch the video above to hear more from Morgan about the precious metals sector.
Gold pulled back slightly overnight on Tuesday, but climbed back above US$2,040 on Wednesday (August 5) morning. By 10:15 a.m. EDT that day, the price had rallied to US$2,051.
After starting the year at the US$1,521 level, the safe haven has added 34.8 percent to its value, prompting speculation on how high it will go. Author and well-known gold commentator Jim Rickards took to Twitter with his thoughts on where the yellow metal could go in the future.
Economists use lots of calculus. It’s just for show since the models bear no relationship to reality. Here’s some simple math: Each $10 rise in the gold price is a progressively smaller % increase since you’re using a higher base. We’ll see more $100 days. Still, it’s real money. pic.twitter.com/o2Ehnkrqbn
— Jim Rickards (@JamesGRickards) August 5, 2020
Finally, gold and silver analyst Dan Popescu offered a more specific prediction for later in the year.
I expect #gold to consolidate above $2,000 and end the year around $2,500. Biden election will bust gold higher, a Trump election will correct short-term gold but with support at $2,000 (Aug. 4, 2020). pic.twitter.com/ZJTZOg3DxM
— 🇪🇺 🇲🇨🇨🇭Dan Popescu 🇫🇷🇮🇹🇷🇴 (@PopescuCo) August 4, 2020
The current economic landscape, including growing geopolitical tensions and concern about how impactful a second wave of COVID-19 could be if it emerges during flu season, will likely continue pushing gold to new heights.
An ounce of gold was trading for US$2,038.45 at 12:15 p.m. EDT on Wednesday.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.