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Gold Regains its Status as the Most Expensive Precious Metal – 06/03/2019

Gold regains its status ...

Gold regains its status as a safe asset, spreads grow
CONTENT

  • Gold market spreads have gone up because people are willing to overpay in the face of scarcity

  • Gold may rise in price if the US decides to blame China for the spread of coronavirus

  • Bitcoin fees skyrocket amid falling hash rate

International consortium of news organizations developing transparency standards.

Gold supply disruptions have led to widening spreads as investors have to overpay to get a safe asset. Bitcoin transaction fees have also gone up, so it is possible that the same is happening in this industry..

Gold prices have almost completely returned to seven-year highs as this yellow precious metal has strengthened as a safe haven. The demand is so high that it has led to supply disruption and widening spreads as people begin to pay premium on the asset.

Widening spreads

Gold regains its status ...

Investor and charting specialist Peter Brandt noticed that due to supply disruptions, gold spreads have changed dramatically: premiums last week on Friday gave way to a collapse.

Gold #GOLD $ GC_F spreads collapse

April-June Gold spread went from premium June on Wednesday to $ 23 under the June on Friday due to disruptions in Gold delivery. LBMA working with major banks to facilitate delivery of gold into NY pic.twitter.com/eukKYIkJlf

– Peter Brandt (@PeterLBrandt) March 29, 2020

At the end of last week it was reported that huge spreads were formed in the gold market, and the value of futures contracts turned out to be much higher than spot prices. [MarketWatch]
Analysts attribute this volatility to the closure of the two largest gold trading centers in the world – New York and London. The market crashed due to the fact that many traders work from home.

Earlier this month, gold prices fell nearly 12% from seven-year highs of $ 1,675 an ounce due to the collapse of global stock markets in March..

The asset then recovered almost entirely, hitting $ 1,660 / oz last week, as the charts show. By the end of trading on Friday, there was a pullback to $ 1,627 / ounce as stock markets recovered slightly after the announcement of massive stimulus from the US Congress.

Pressure on gold markets could increase next week, according to Kitco, as the US surpasses China for COVID-19 infections. According to analysts, the closure of gold mining and processing centers could further increase the pressure on the markets, and the premiums paid for the purchase of goods or futures will remain high..

Gold regains its status ...

Comparison of Bitcoin indicators

Market metrics paint a slightly different picture for Bitcoin. According to Bitinfocharts.com, the average transaction fee is up more than 500% this year, peaking at $ 1,768 on March 20, 2020. This would happen in the midst of a major sell-off in the cryptocurrency markets as fees are now back around $ 0.75..

Bitcoin’s hashrate has also dropped from all-time highs of 133.29 EH / s to almost 100 EH / s. The 25% decrease may be due to the closure of unprofitable mining farms due to the price collapse. The hash rate could drop even more if some miners leave the market after the halving, which happens in just 45 days.

Bitcoin’s Fear and Greed Index dropped below zero this weekend, which means further losses are possible in the market.

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