Gold has held above $1,800 (£1,423) per ounce (oz), hitting the highest levels since 2011, coinciding with a weaker US dollar and fears that the country's economic recovery could start to abate.
Gold has traditionally done well when the US dollar has been weak and inflation low. Those boxes have been ticked, especially with concerns over a second wave of Covid-19 rising in the US and elsewhere.
Investors have already jumped on board with gusto. In figures for the first half of 2020 released this week, the World Gold Council confirmed massive ETF inflows. Assets under management in the sector increased by $39.5bn, to $206bn. The inflow by weight - 734 tonnes, or 26m ounces - would have been a record for a full year, let alone a six-month period.
Spot gold hit $1,811/oz on Wednesday, according to the London Bullion Market Association (LBMA).
BMO Capital Markets analyst Colin Hamilton said signs remained good for further price rises. “With monetary policy remaining loose and real rates declining further, the current environment is highly supportive for gold prices despite a slump in consumer demand,” he said.
Gold miners have had similar returns to the metal itself this year, with the VanEck Vectors Gold Miners ETF (US:GDX) up over 30 per cent year-to-date. Mr Hamilton highlighted the gap between gold in US dollars and local currencies for miners, many of which saw all-time gold prices months ago.
