Gold scored a new record high amid concerns over issues such as the coronavirus pandemic and tensions between the United States and China.
The precious metal at the time of writing is trading at $ 1,964, the highest value in its history. Analysts already predict that the $ 2,000 figure is imminent.
In today’s reflection we are going to analyze whether gold is the safe haven chosen by investors to safeguard their savings, or if Bitcoin can be the alternative.
The price of Gold is heading to US $ 2,000
“We believe that the current momentum in the coming months will cross the $ 2,000 per ounce mark. The key question is how much the recovery will increase after that, ”Vivek Dhar, mining and energy commodity analyst at the Commonwealth Bank of Australia told CNBC on Monday.
He added that to see prices well above that level, such as $ 2,500 an ounce, the United States would have to move interest rates to below zero.
There is an inverse relationship between gold prices and real returns. Real return is a return on investment that has been adjusted for inflation.
When real yields go down, gold prices will go up, and vice versa. In such a scenario, the opportunity cost of owning gold, an unprofitable asset, is lower, since investors are not giving up interest that would otherwise be earned on profitable assets.
Joshua Rotbart, managing partner of precious metals distributor J. Rotbart & Co., also predicted that gold prices will soar beyond $ 2,000 by the end of the year.
That rush to buy the precious metal is fueled by a “fear factor” among investors due to the coronavirus pandemic and the weakening global economy, he told CNBC on Friday. “Investors are nervous, they are afraid, there is a fear factor and they are rushing towards gold.”
Bitcoin, the alternative
Bitcoin, in tune with Gold, shot up sharply in today’s session. There is no doubt that both assets are the preferred refuge for investors.
At the time of publication, Bitcoin is trading at $ 11,200, with a 12% gain in the last 24 hours, according to CryptoTrend’s Crypto Online tool.
Personally, I believe that Bitcoin has more potential in the medium and long term, but gold is still a very safe asset, especially to preserve value in times of turbulence like today.
So far this year, Gold has a yield of 28.8%, while Bitcoin is 55.4%.
I say goodbye until tomorrow with this phrase by Fernando Savater:
“My dream is that of Picasso; have a lot of money to live calmly like the poor ”.