In August, the gold price hit its all-time high in US dollar terms when nearby COMEX futures rose to $2063 per ounce on the continuous contract. Before July 2020, the previous record peak was in 2011 at $1920.70.
Gold broke out to the upside in June 2019, when the price of the precious yellow metal rose above its medium-term technical resistance level at the 2016 peak of $1377.50 per ounce. Over the next fourteen months, the rally took the price over $685 higher or 49.8% above the 2016 high. Meanwhile, the gold market has made new all-time highs in all of the world’s leading currencies, which has been a comment on the value of the foreign exchange instruments that derive values from the full faith and credit of the governments that issue the legal tender. While most countries hold gold as an integral part of their foreign exchange reserves, there has not been a gold standard in any nation in decades. Gold has been consolidating since its most recent high, with the price settling at $1934.30 per ounce on the nearby December futures contract on Friday, September 4. The December contract reached a peak of $2089.20 on August 7. Since then, the December futures reached a low of $1864.20. At last week’s closing level, the price was $42.40 below the midpoint of the trading range since August 7.
The action in the US stock market late last week was a sign that we could be at the start of another correction after the V-shaped recovery since March that took many equity prices to new all-time peaks. A risk-off environment could cause an even deeper correction in the gold market, which I would view as another compelling buying opportunity for the coming years. The Van Eck Vectors Gold Miners ETF product (
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