Coronavirus scare pushes gold to record high

Gold producers are continuing to relish record prices as the commodity once again listed an all-time high, skyrocketing to $US1666 ($2520) this morning.

High prices are being supported by safe haven buying from fears of the coronavirus not yet being contained in China and the news of a longer incubation period that initially thought, according to ABC Bullion.

Gold companies dominated the ASX200 top five gains since the rise in price, with Saracen, St Barbara, Northern Star and Resolute sitting first, second, fourth and fifth respectively.

Saracen’s share prices jumped by 6.32 per cent to $4.45, St Barbara rose by 4.90 per cent to $3, Northern Star gained 4.85 per cent to $15.17 and Resolute improved by 4.64 to $1.24.

As the price for the precious metal soared, the Australian dollar dipped below 0.66.

Investment banking company Citigroup said it expects gold to hit $US1700 in the next six to 12 months and $US2000 in the next one to two years.

“Market jitters will prompt investors to pile into the so-called safe haven asset, to hedge against the stock market falling,” Citigroup stated.

CPM Group also sees potential for gold prices above $US2000 within the next five years, before falling back after 2025.

This is due to the adequate supply worldwide of mineable gold and the view of gold as a safe asset while amidst global market shakers such as coronavirus, United States and China trade tensions and Brexit.

“This is not to say that massive global debt, deficits and derivatives markets will not ultimately cause problems, but it could be later than many gold bugs expect,” CPM Group stated in its Gold and Other Metals in 2020 presentation.

“It is starting now, but could take several years to really develop.”

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