Coronavirus scare pushes gold to record high

Gold producers are continuing to relish record prices as the
commodity once again listed an all-time high, skyrocketing to $US1,666
($2,520) on Monday morning.

High prices are being supported by safe
haven buying from fears of the coronavirus not yet being contained in
China and the news of a longer incubation period that initially thought,
according to ABC Bullion.

Gold companies dominated the ASX200 top
five gains since the rise in price, with Saracen, St Barbara, Northern
Star and Resolute sitting first, second, fourth and fifth respectively.

Saracen’s
share prices jumped by 6.32 per cent to $4.45, St Barbara rose by 4.90
per cent to $3, Northern Star gained 4.85 per cent to $15.17 and
Resolute improved by 4.64 to $1.24.

As the price for the precious metal soared, the Australian dollar dipped below 0.66.

Investment
banking company Citigroup said it expects gold to hit $US1,700 in the
next six to 12 months and $US2,000 in the next one to two years.

“Market
jitters will prompt investors to pile into the so-called safe haven
asset, to hedge against the stock market falling,” Citigroup stated.

CPM Group also sees potential for gold prices above $US2,000 within the next five years, before falling back after 2025.

This
is due to the adequate supply worldwide of mineable gold and the view
of gold as a safe asset while amidst global market shakers such as
coronavirus, United States and China trade tensions and Brexit.

“This
is not to say that massive global debt, deficits and derivatives
markets will not ultimately cause problems, but it could be later than
many gold bugs expect,” CPM Group stated in its Gold and Other Metals in 2020 presentation.

“It is starting now, but could take several years to really develop.”

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