Gold is facing a similar launch pad as in 2008, when prices breached $1000/oz and began the rally which led to all-time high level of just above $1900, said Bloomberg Intelligence senior commodity strategist Mike McGlone, and reported in Kitco News.
"It was the cut to zero interest rates by the Federal Reserve in December 2008 that accelerated the gold bull market to the 2011 peak. Covid-19 is a worthy catalyst to buoy gold toward its highs.
"That fact that the metal has reached records in most currencies leads us to expect that a similar result for dollar-denominated gold is only a matter of time," McGlone wrote in May's update.
Gold is set to hit new 2020 highs on unprecedented Federal Reserve monetary stimulus.
"With base rates at zero or negative, and the Federal Reserve embarking on seemingly unlimited monetary stimulus akin to 2008, we see gold extending its $1900-an-ounce peak as the next in a stair-step recovery process," McGlone noted.
"The quasi-currency price has a strong relationship with Fed rate expectations."
