Commerzbank: further stimulus would boost gold as 'store of value'
Gold would benefit even more if governments and central banks keep piling on stimulus and monetary accommodation, said Commerzbank. The precious metal threatened $1,750 an ounce Tuesday, hitting its highest level in seven years. In euro terms, gold hit a record high of almost €1,600 per troy ounce, Commerzbank pointed out. “It was profiting from the considerable uncertainty that still surrounds coronavirus, even if stock markets were looking positive,” said analyst Daniel Briesemann. Meanwhile, the International Monetary Fund issued a report predicting that the global economy will shrink by 3% this year and could enter the worst recession since the Great Depression in the 1930s. “If its assessment proves accurate, governments and central banks could initiate additional fiscal and monetary policy support measures, which would cause the already large mountain of debt facing many countries to increase even further,” Briesemann said. “This should benefit gold in its capacity as a store of value.”