Gold is off to a rip roaring start this week, with prices remaining solid at an almost eight year high. Yesterday (Tuesday) the precious metal was trading at $1,779.50, which is the highest figure per ounce since the beginning of 2013.
The strong performance comes amid weaker than expected recovery data for the manufacturing and service sectors with the HIS Markit U.S. Manufacturing Purchasing Managers Index for June coming in at 49.6, just shy of the expected 50 reading.
HIS Markit’s chief business economist, Chris Williamson said that the road to recovery will be long – something that will obviously further favour gold in the months to come. He explained, “Although brief, the downturn has been fiercer than anything seen previously, leaving a deep scar which will take a long time to heal. We anticipate that the US economy will contract by just over 8% in 2020. The coming months will therefore see the focus turn to just how much recovery momentum the economy can muster to recoup this lost output.
“Any return to growth will be prone to losing momentum due to persistent weak demand for many goods and services, linked in turn to ongoing social distancing, high unemployment and uncertainty about the outlook, curbing spending by businesses and households. The recovery would also be derailed by new waves of virus infections.”
Buy gold now to secure your portfolio ahead of what could be a stop-start economy for the foreseeable future.