Gold price to record high: $1,940 per troy ounce

The gold price has also reached a new record in dollar terms today. The price rose to $1,940 per troy ounce on Monday, easily surpassing the previous record of $1,920 set in September 2011. Investors are seeking refuge in safe havens due to the corona crisis. Due to the extremely low interest rates, the precious metal has become an attractive alternative. Silver is also gaining popularity, as the Silver price rose to its highest level in seven years.

The Gold price has been in an upward trend for some time, which has been exacerbated in recent months by the corona crisis. Governments and central banks launched large-scale stimulus programs to support the economy. Investors fear that the money will lose value as a result of these measures and are therefore seeking refuge in precious metals.

Gold price to record

The speed with which the gold price has broken the old record is striking. Within five days of touching the $1,800 mark, the $1,900 level was also passed. At the time of writing, the price is hovering around $1,940 per troy ounce. At an exchange rate of $1.17 against the euro, this equates to a gold price of €1,651 per troy ounce and just over €53,000 per kilo.

The silver price fell hard in March and then lagged behind the gold price. Until a week ago, when the price suddenly skyrocketed. In seven days, silver went from $19.30 to $24.30 per troy ounce, an increase of more than 25%. The silver price rose from €540 to €665 per kilo in a week's time. Measured in euros, this precious metal is now at its highest level since April 2013.

Measured in terms of purchasing power, the gold price is not yet at a record high. Adjusted for inflation, the precious metal is now less precious than it was during the previous record in 2011 and much less than during the previous peak in 1980. That's because a dollar today has far less purchasing power than it did in 2011 and only a fraction of the purchasing power it did in 1980.

Gold price adjusted for inflation is not yet past the old record (Source: Bloomberg)

What will the gold price do?

Several banks have significantly revised their price targets for gold and silver upwards in recent weeks. Apparently, they were surprised by the speed of the movement. Goldman Sachs sees the gold price rising further within twelve months to $2,000 per troy ounce. Citi predicted a week ago that it would was only a matter of time before the old record would be broken. This bank expects the gold price to break the $2,000 mark within 12 to 24 months. ABN Amro is also of the opinion that $2,000 per troy ounce within reach is.

Bank of America is going a step further by raising its price target for the next 18 months to $3,000 per troy ounce. In a new report entitled 'The Fed can't print gold', the bank writes that the value of money is coming under pressure due to the combination of economic contraction and unprecedented fiscal and monetary stimulus. The precious metal will benefit from this.

Gold price in dollars to record high

Silver is catching up and is at its highest level in seven years

This contribution was made from Geotrendlines