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- Gold heads for best year in a decade with dollar on the ropes
Gold heads for best year in a decade with dollar on the ropes
Bloomberg reports that gold is poised to cap the biggest annual advance in a decade after a tumultuous year, with gains this month aided by the dollar’s decline to the lowest level since April 2018.
Bullion hit a record in August as investors sought haven assets amid the pandemic. The surge was buttressed by unprecedented waves of stimulus, including from the Federal Reserve, which fanned concerns of currency debasement. Holdings in bullion-backed exchange-traded funds set an all-time high in October, although they’ve since ebbed with the roll-out of vaccines.
“Gold’s main drivers -- weaker U.S. dollar and low real interest rates -- are likely to provide support” even as vaccines are distributed around the world, said Vasu Menon, executive director, investment strategy, at Singapore-based Oversea-Chinese Banking Corp. With the lower-for-longer Fed, “it is too early to throw in the towel on gold,” he said in an email.
Bullion up 6.55% this month, and 24.75% higher over 2020, poised for the biggest full-year advance since 2010.
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