Tuesday, September 29, 2020 4:19 AM EDT
Global deaths from the coronavirus hit 1 million this week as both developed and emerging economies struggle to contain the virus ten months after it first broke out. According to the World Bank, it has pushed 38 million more people into poverty. With global economies struggling to deal with the pandemic amid new lockdown restrictions and recessions many analysts continue to talk up gold.
Kelvin Tay, the regional chief investment officer at UBS Global Wealth Management told CNBC that "gold is likely to actually hit about $2,000 per ounce by the end of the year." Tay goes on to explain that gold represents a "very good hedge" among the economic backdrop right now.
Gold price surged higher earlier this year surpassing the $2,000 per ounce level for the first time in history during August 2020. Since then, the price has fallen and has been hovering around the $1,850 level this week.
As the Fed has already committed to keeping interest rates at historic lows for quite some time, gold tends to become more attractive has the cost of holding it is relatively low, compared to the low yields on other assets.
In April, Bank of America revised their 18-month price target for gold from $2,000 to $3,000 per ounce showing just how in focus the precious metal is from an institutional level.
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