In recent days, the price of the precious metal exceeded USD 1,940 per ounce. Its previous all-time high was at USD 1,921, which it achieved in 2011.
Investors’ eyes are on the all-time high that gold recently reached since it exceeds USD 1,900 per ounce. At the time of writing this article, the price of the precious metal was at USD 1,943, well above the all-time high of USD 1,921 that it achieved on August 22nd, 2011.
There has been an upsurge in the number of COVID-19 infections in the USA, along with the expected agreements in Congress regarding a new stimulus package for the economy. This situation seems to have led investors to seek refuge in assets such as gold, given the instability of the US fiat currency.
Besides, users’ search for securities that they perceive as safe-haven assets have influenced the rebound of the first cryptocurrency, which exceeds the USD 10,000 mark.
Effects of New Stimulus Package on Price of Gold
In recent days, the US Government is delivering the last checks contemplated in the first federal aid package in March, which exceeded an expenditure of USD 2 trillion. There have already been discussions about the details of a new phase of aid to the economy.
However, Mitch McConnell, the Republican leader in the US Senate, recently officially announced a new issuance of checks to help the population. He stated that the government wants another round of direct payments to help American families continue to move toward the recovery of the country’s economy.
The National Bureau of Economic Research (NBER) predicts a 40% contraction in the US gross territorial product for the second quarter. If the official results were worse than expected, there could be a further appreciation of gold, which would shoot its price above USD 2,000 per ounce.
At the beginning of July, the price of gold had approached the levels that it had reached in 2011. The reason for this is a growing interest from European and American investors and the decrease in imports from China and India.
Bitcoin Is the Alternative
The price of Bitcoin, together with that of gold, soared dramatically on July 27th. Without any doubt, both assets are investors’ preferred stores of value.
At the time of writing this article, Bitcoin is trading at USD 11,200, with a 12% gain in the past 24 hours, according to data from CoinMarketCap.
Both Bitcoin and gold have great medium and long-term potential, making them very secure assets. For that reason, users come to them to safeguard value in times of turmoil like the current one.
Until now this year, gold has achieved a yield of 28.8%, while that of Bitcoin has been 55.4%.
In a few words, investors can be confident that these assets are the best options in the market, in particular the pioneering cryptocurrency. The ability of Bitcoin to recover from all-time lows has confirmed this on many occasions.
By Alexander Salazar