What's driving record gold prices? How much higher could they go?
Spot gold surged past $2,000 an ounce for the first time ever on Tuesday, and prices kept climbing on Wednesday.
Gold is up more than 30 percent this year - placing it among the best before assets. What is driving the relentless rally in all that glitters? And how much higher could gold prices go?
Hold on, rewind a second. What do you mean by 'spot' gold?
Spot gold refers to the price of an ounce of gold right now, at this moment in time, as opposed to some point in the future.
And why worry about the future?
Gold investors worry a lot about the future. That helps explain why gold - like other precious metals - also trades on the futures market.
What is the futures market?
That is an exchange where buyers agree to take possession of gold from the seller at a future date, but at a price agreed upon by both parties in advance.
Any other basics we should cover first?
Gold also trades through funds that offer investors exposure to gold bullion, gold futures and companies that mine gold, without having direct ownership of the metal.
So what's driving this rally in gold prices? Let me guess- the pandemic?
You win a gold star because yes - it is primarily the massive economic disruptions triggered by the pandemic that are driving gold higher, as well as the response to them from governments and central banks - especially the United States Federal Reserve - not to mention opacity surrounding the path of the virus ...
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