Gold price rises to its highest level in seven years

The great uncertainty about the consequences of the corona crisis for the entire global economy is causing the gold price to rise further. The trade conflict between the United States and China is also having an impact.The gold price has climbed to its highest level in seven years at the start of the week, according to economic warnings from the Fed. On Monday morning, the troy ounce of gold (31.1 grams) meanwhile cost $ 1764, which is around $ 19 more than on Friday.Gold demand thus once again benefited from the high level of uncertainty surrounding the recovery of the global economy from the Corona crisis. As the US Federal Reserve announced in its semi-annual stability report on Friday, the real estate sector in particular is one of the sectors that could suffer from a possible worsening of the corona crisis. Fed weekend chief Jerome Powell warned in an interview that the recovery in the U.S. economy could drag on into 2021.

 

Poor US economic data

On Friday, poor US economic data once again underlined the importance of the corona impact on the US economy. Retail sales and industrial production dropped to historic lows in April.Gold generally benefits from low interest rates in all major economies. The zero interest rate policy makes gold, which pays no interest, more attractive for investors. This trend was reinforced by the discussion in the United States about negative interest rates. The US Federal Reserve has so far shown no willingness to do so, but speculation continues.