Although the soaring gold price could be an indicator of economic uncertainty, financial markets in Indonesia and overseas have generally been performing well since the slump in March, according to Mirae Asset Sekuritas Indonesia economist Anthony Kevin.
"Investors may have become anxious that the appreciation in stock prices will not be justified in second quarter earnings, prompting them to buy gold as a hedge against market volatility", Anthony said.
The strategists raised their 12-month price target for gold to $2,300 an ounce, or 19 percent above the record $1,931 where July futures settled on Monday. The sharp rise in silver price has, however, pushed investors to sidelines.
Orion Advisor Solutions CIO Rusty Vanneman discusses his top ETF sector picks if the us dollar continues to weaken. "The move to $2,000 an ounce will happen much more quickly than the move from $1,800-$1,920", he said.
Worries over the impact of rising coronavirus cases on global economy and expectations of possible inflation from more stimulus measures supported gold. Geopolitical tension between US & China and weakness in dollar supports the bullions.
All of the largesse has pushed the US dollar index down by 2.7 percent this year; it's trading near its lowest level since June 2018. Expectations are they'll keep interest rates near zero, while markets will also be watching for any signals around shifts in strategy.
"The message from the Fed meeting is expected to be dovish, reiterating the need for more fiscal measures, which is likely to be supportive of gold", said Nicholas Frappell, global general manager at Sydney-based ABC Bullion.
"In our view the primary drivers of the gold price are its negative correlation to real interest rates and the dollar". Last week, gold prices recorded one of the best weeks in the last few years by gaining over 5%.
For silver, there's an added boost from concerns about supply, with the Silver Institute earlier this month forecasting a 7% decline in mine production in 2020.
Silver tends to perform very strongly when the desire for wealth protection, or fears of inflation-induced wealth destruction, are high and when global economic activity is improving, according to Citigroup. Along with Gold, the week's trading session started on a strong foot for silver as well, touching the 8 years high of Rs 64,849.
Until then, it remains to be seen if the crowding behavior in the US Dollar will also carry into August as the IG Client Sentiment reportcontinues to show retail traders net-long USD/CHF, USD/CAD and USDJPY, while the crowd remains net-short NZD/USD, AUD/USD, GBP/USD and EUR/USD.
More Than 1,000 New COVID Cases Reported in Nevada Tuesday
The Chippewa County Department of Public Health has released an update on where Chippewa County stands in terms of COVID-19 cases. So far, hospitalizations have increased only slightly from a low this month of 231 on July 10 to 257 on Monday.