The price of gold broke Tuesday, July 28 in Asia a new historical record, erasing that of the day before, still benefiting from its status as a safe haven in times of crisis and weak dollar.

The price of an ounce of gold rose to $ 1,981.27 on Tuesday morning during trading in Asia, beyond its peak the day before, which reached $ 1,945.72. The latter had already scored an absolute record and erased the previous one, dating back to 2011.

Tuesday around 9 am GMT (11 am in Paris), gold then fell back to around 1,942 dollars an ounce, showing a fall of 0.74%. 

"Investors hope the price of gold will continue to rise"

The crisis and the great uncertainties linked to the pandemic, central bank policies which are still lowering bond interest rates and the weakness of the dollar are currently benefiting this safe haven par excellence. The price of the yellow metal has therefore appreciated by more than 25% since the start of the year.

"With ultra-accommodative monetary policies around the world and central banks running high cash printing, investors are hoping the price of gold will continue to rise," said Naeem Aslam, analyst for Avatrade. .

Favorable monetary policies

Central banks have indeed injected unprecedented amounts of liquidity into the economy, with a view to alleviating the economic crisis caused by the measures intended to combat the pandemic.

>> Read also: Why central banks seem powerless in the face of the coronavirus

Also, since the gold market is denominated in dollars, a decline in the US dollar makes bullion less expensive for buyers using other currencies.

However, the greenback has weakened markedly in recent months under the effect of the vast monetary easing policy of the American Federal Reserve (Fed) put in place to support the United States economy shaken by the coronavirus.

Beyond monetary policy, gold "has been supported by rising geopolitical tensions between the United States and China," concludes analyst Naeem Aslam.

With AFP

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