Inside gold price's wild ride in 2020

2020 is a memorable year for all the wrong reasons, but for those monitoring precious-metals markets, there’s some upside to the dark months we’ve all endured since March: the gold price history this year reveals how wildly it swung upwards, passing $2000 USD an ounce in August, reaching an all-time high.

It’s no surprise the pandemic influenced the price of gold. After all, the reason gold often is so resilient during stock market crashes is that the metal and the market are negatively correlated. So, when one shoots up, the other tends to lower.

As we noted in this blog post, the stock market benefits from economic growth and stability while gold shines during financial distress and crisis. “If the stock market falls, panic often sets in, and investors typically seek out the safe haven of gold. If stocks are enjoying a great era, the perceived need for gold from mainstream investors is low,” we wrote, explaining how gold can be a safe haven to many investors during times of chaos and uncertainty.

A CNBC article notes that, as the world’s earliest form of currency, gold’s physical properties have given it the idea of being a reliable store of value. It is widely available enough to trade but is in finite supply, making it more attractive since its rarity is considered valuable, and it’s also durable and not corrosive.

Also, in July other experts shared insight on the reasons for the gold price boost: “Central banks around the world have aggressively eased monetary policy, and governments have implemented fiscal stimulus at unprecedented pace and scale to mitigate the pandemic-induced global recession. Long-term U.S. real interest rates have fallen to negative levels and the amount of government bonds in negative yielding territory has risen.”

Al Jazeera wrote on another factor worth keeping in mind when we see fluctuations in the gold price history: the US federal budget deficit reached $2.7 trillion in the first nine months of fiscal year 2020, more than the deficit recorded during the same period last year.

The report goes on to say: “That record-shattering deficit, combined with ultra-low interest rates, has depressed the value of the US dollar to the point where some are questioning whether the mighty greenback’s role as the global reserve currency is sustainable in the long run. That makes gold a more attractive investment relative to the dollar because the precious metal is seen as a hedge against currency depreciation.”

When gold reached $2,000, it was reported that the gold price history showed how it rose 30% since the pandemic struck the world in early 2020. The $2,000 mark was also an eye-opener, since the previous high gold had reached was $1,921 in 2011.

Currently the price of gold sits at $1,849, at the time of this writing. We may have seen stability due to the ascension of president-elect Joe Biden to the White House, fending off jittery fears of President Trump’s unpredictable policies, but today’s price is still higher than what Goldman Sachs told media in March: “Both the near-term and long-term gold outlook are looking far more constructive, and we are increasingly confident in our 12-month target of $1,800/toz.”

What this means for anyone interested in selling gold

The bullish trends of gold enjoying its moment in the sun during these cloudy months means gold owners could trade in their precious-metal items for an impressive return. As we noted in early November:

“Collectors need to realize they shouldn’t wait to sell their items to a reputable gold buyer,” says Daniel Ilmer, Muzeum’s VP of operations. “Get what you can now, even if you notice the price of gold is up. You just never know when it’ll start moving downward.”

Now could be the right time to root around your garage, basement, and closets to find gold jewellery or gold coins lying around, gathering dust. Why wait for the price of gold to correct itself when you could be selling gold for extra cash that you and your family may need now more than ever, as COVID-19 cases continue to climb in Canada and the US, forcing many regions to enact lockdown policies?

You’ll want to find experienced buyers, such as Muzeum, who are transparent about displaying what they pay and the kind of items of interest to them and their collectors. If you’re looking for more tips on sourcing knowledgeable and trustworthy companies to contact, read this blog post.

If you have questions about selling gold to Muzeum or other businesses, or you’re interested in a free assessment of your gold items, contact us today.