Gold approaches record high as it closes out extraordinary week, silver up 17.5% on week

(USAGOLD –7/25/2020) – Gold continued its march toward record highs this morning as it closes out what’s been an extraordinary week.  It is trading at $1904 – up $15 on the day thus far and just under its record price set in 2011. Silver is up 17¢ at $22.88. On the week, gold is up 5% and silver 17.5%. This summer’s strong advance in both metals is most directly related to the economic ill-effects of the coronavirus and the stimulus/rescue programs launched by central banks and governments around the world to combat it.

“The [August] contract ended [yesterday] just short of the most-active contract settlement record of $1,891.90 from August 22, 2011,” writes MarketWatch’s Myra Saefong in her daily column on the gold market, “based on records going back to November 1984, according to Dow Jones Market Data. The record most-active intraday level stands at $1,923.70 an ounce from Sept. 6, 2011. However, the front-month July gold contract which trades on significantly lower volume, settled at $1,889.10 on Thursday, up $25, or 1.3%, for the session. That’s a record for the front-month contracts, based on data going back to 1975.”

Chart of the Day

Bar cjhart show gold's annual average price since 1970

Sources: ICE Benchmark Administration Limited (IBA), St. Louis Federal Reserve [FRED]

Chart note: This long-term chart on the annual average price of gold since 1970 dispels the notion that gold is somehow volatile or unpredictable and as a result unreliable as a long-term portfolio safe haven. To the contrary, it shows gold living up to its reputation as a reliable portfolio safe haven during times of rapidly changing economic circumstances.  The strong showing for 2019 is worth noting with the average price at $1392 per ounce. At this morning’s near record price of $1893 (not shown on chart), gold is now trading 36% higher than 2019’s average price.

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