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Gold continues to rise as alarm strikes economies of US and EU

Content image - Phnom Penh Post
Long Samnang, business manager at Golden FX Link.

Gold continues to rise as alarm strikes economies of US and EU

The price of gold reached the highest in history in the third quarter of this year – breaking the previous record in September 2011 of $1,921 per ounce, or $2,314 per tael in Cambodia’s gold market – rising to $2,074 per ounce.

Although global gold demand fell 11 per cent in the second quarter, the price of gold still continues its bullish momentum as the US has been hit massively by the outbreak of Covid-19, severely impacting its economy.

The US Federal Reserve’s annual economic symposium in Jackson Hole ended last week without any effective resolutions from monetary authorities around the world on planning financial stability policies and minimising the downturn in the financial system.

Meanwhile, the European Central Bank released a report on the current situation, one which could easily lead to a serious economic crisis.

Similarly, the US indicated that its financial markets remain in a slump.

However, it has the expectation that the long-term implementation of low interest rate policies could offset negative effects, while the plan to have inflation at two per cent to maintain economic stability will be temporarily set aside.

The price of the US dollar will fluctuate in line with the release of key US economic news this Friday, including on average hourly earnings, non-farm employment changes and the unemployment rate.

Therefore, based on technical and fundamental analysis, the price of gold could increase from the $1,972 currently to $2,030 per ounce in early September, exposing a good opportunity to invest in gold.

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