Weak U.S. Dollar Boosts Gold Above $2K, Just As It Will Boost Bitcoin to a New All-Time HighGold is breaking records today, and tomorrow it will be Bitcoin.
August 5, 2020, will forever remain engraved in the history of gold. Indeed, it is the day when an ounce of gold surpassed the $2,000 price for the first time in its history.
Gold began the year 2020 at an already very high level of $1,520 an ounce. Aside from the significant drop it experienced a few days during the liquidity crisis that hit the world in March 2020, the gold price has never stopped to rise this year.
After gold reached $1,900 an ounce in mid-July, everyone was betting that the symbolic $2,000 barrier would be reached by the end of the summer. And then things accelerated incredibly. At the time of writing, the gold price is $2,048 an ounce.
Since the beginning of the year, the price of an ounce of gold has risen +35%. Over 5 years, the gold price has even increased by +85%.
The success of the precious metal has made all the fervent defenders of hard money, of which gold is an emblematic representative, rejoice. Many nostalgic people for the gold standard system are beginning to dream of a return to a central role for gold in the monetary and financial system.Gold’s current success is part of a more global phenomenon
While all these people are feeling euphoria at the record level reached by an ounce of gold, I suggest that they step back and look at the bigger picture.
It starts by looking at the silver price evolution.
Since the beginning of 2020, the price of an ounce of silver has risen by 51%. With a current price of $27,10, an ounce of silver is still far from its two historical records of $49,45 and $44,79 reached in 1980 and 2011 respectively.
However, at the pace things are going, I’m pretty sure that the price per ounce of silver will exceed $30 by the end of the year. For an ounce of gold, imagining a price above...