Gold prices, triggered by a weakened dollar and a stumble in U.S treasury yields, recorded a more than four-month surge,raising investors’ appetite for the precious metal often considered a hedge against inflation.
Gold, as of Wednesday morning stood at a peak of $1,910.63 per ounce, its first time since early January. On the other hand, the dollar index plummeted towards a four-month low at 89.71 while benchmark U.S Treasury yield plunged to a two-week low.
Nish Bhatt, founder and CEO of investment consulting firm Millwood Kane International,India, noted that the rise in the yellow metal has been on account of the fall in US Treasury yields, softer US dollar which pushes up the gold prices. The commentary by the US Fed on rising inflation, he said, has also helped gold prices.
Bhatt added that the current scenario combined with the rising number of cases due to the second wave in India and some Asian countries will lead to investors turning to a safe haven and help further rally in gold prices.
With gold marking a good performance in the past two months, analysts assert that it could push on to a new record if inflation fears continue to rise and the dollar weakens further.
Edward Meir,Markets analyst at ED&F Man Capital, raised optimism that gold has a good chance of getting to $2,000 in the second of 2021, adding that in the shorter-term, $1,900 looks to be the next logical target.