US$2,000 may be a new normal for gold

IN MARCH 2020, along with global equities, the benchmark Comex Gold futures fell from grace as it tumbled 14.49 per cent. Within the same period, Nikkei 225 and Hang Seng futures nose-dived by 19.4 per cent and 19.5 per cent respectively, and the S&P 500 futures saw 22.3 per cent of its value wiped out.

Since the middle of July, gold has soared, cheekily up to a high of US$2,000 per ounce last Tuesday, before turning its head to settle at US$1,963.90, seemingly to wait on its prey - the Free Open Market Committee (FOMC) statement, which was due for release the next day.

On the back of the ongoing Covid-19 pandemic and economic uncertainty, the Fed maintained the federal funds rate at 0 to 0.25 per cent. Gold futures spread its wings and rose boldly again, this time just shy of the previous day high at US$1,998.40 before settling at US$1,976.70.