Gold Prices Could Break Record by End of Year – Report

Sputnik news agency and radio 16:43 GMT 23.05.2020

The price of gold has seen a significant increase (12 percent) this year amid the coronavirus pandemic, which has wrought severe financial damage. Recently, the price jumped due to rising tensions between the United States and China over what Washington labelled Beijing’s cover-up of the disease - a claim Chinese authorities deny.

Gold prices could reach a record high by the end of this year, according to MarketWatch, a website that provides financial information and business news. Darwei Kung, a portfolio manager and head of commodities at the asset management firm DWS Group, who spoke with MarketWatch, said he expects gold prices to gradually increase over time.

"While equity prices have risen, we continue to see gold as a good hedge given the uncertainty", said Kung. He suggested that next year, prices may reach as high as $1,800 for an ounce of the precious metal.

Peter Grosskopf, chief executive officer at Sprott Inc, is even more upbeat about the future of gold. Grosskopf, who described gold prices as a "chameleon" and "anti-confidence thermometer" that does equally well during times of deflation and inflation, said the precious metal could break its previous peak of $1,891 in 2011 and may be trading at more than $1,900 or $2,000 for an ounce by the end of 2020.

"More investors need to add gold as a protection asset in their portfolios", Grosskopf says, adding that this would create "more demand than the market can handle". According to Grosskopf, gold will continue to do well irrespective of whether more countries reopen their economies or whether a second wave of the coronavirus will prompt authorities to prolong the nationwide lockdowns, which are hurting the economy.