Gold (XAU) kicks off the first week of 2021 reaching an 8 week high by surpassing US$1,900 early in today’s trading. While the pandemic continues to spike and global restrictions get tougher, Gold and Silver (XAG) take advantage of the weakening U.S. Dollar.
Despite vaccine-driven optimism of global recovery, the U.S. Dollar has continued to decline. This in turn, has made Gold (XAU) affordable to other currency holders.
Gold seems to have become a safe-haven for some traders, and thus could be one of the reasons for its price rising as well as growing global uncertainty. Political discussions regarding stricter pandemic restrictions in Europe and Britain as well as anticipation about Tuesday's electoral results in Georgia (U.S.), which will reveal who will control the Senate may have been some of the key reasons for the jump.
Another reason for Gold’s rise might be the renewed declines in U.S. bonds real yields. Real yields dropped below 1% on Friday in the U.S, bringing attention to Gold as a safe haven alternative. This adds to surging COVID-19 cases which overshadow America’s potential for an economic recovery.
Metals Rise as the U.S. Dollar Slumps
Other metals that have started the new year with a high and may follow Gold’s footsteps are:
Silver (XAG), which rose as much as 3.6% early in this morning's trading and has been showing an uptrend since the beginning of December 2020.
Copper (HG), which hit a monthly high of 3.6442 per pound on December 18, 2020. It has risen 2.2% early this morning.
Platinum (PL) reached a high of 1,122.45 per troy ounce, being this precious metal’s highest value since 2016.
As the pandemic remains untamed and global lockdowns are in place, Gold rises as more people turn to this commodity as a safe haven. However, it is unclear if Gold and other metals will continue to rise this first quarter, as the COVID-19 vaccine success rate is yet to be determined.