Gold prices hit $1,820.6 per ounce at the start of trading on 11 January – the lowest since mid-December. In the subsequent hours, however, the metal managed to regain most of its losses in the subsequent hours, but fell short of recovering after the recent drop.
The precious metal hit its new low as a part of a negative trend that has been ongoing since 6 January. The trend coincided with the dollar seemingly starting to recover from its fall in price, which began at the beginning of November following Election Day. The greenback has jumped 1.4% since 6 January, which coincides with the growth of yields on US Treasury bonds. The latter have made the US government's securities more attractive to investors than gold, Bloomberg suggested, citing economists.
Since reaching a peak of $2,069.4 per ounce in August amid the pandemic, gold has been gradually losing value despite a second wave of infections. It dropped to the lowest point on 30 November amid the news of two American COVID-19 vaccines being officially authorised for use in the US, UK, and several other countries, sparking hopes of an upcoming end to the pandemic and lockdowns.
Following the steep drop to $1,780.9 at the end of November, the precious metal started growing again, as despite the start of vaccinations, the number of infections continued to grow, forcing several countries across Europe as well as numerous US states to reintroduce certain lockdown measures. Bullion once again peaked, this time at $1,954.4 on 5 January, but went sharply down afterwards.
The metal has long been regarded as a safe haven by investors for preserving money in turbulent and uncertain times, and 2020 was no exception. Gold rose by a record-breaking 20% over the past year amid a rapid surge of investor interest caused by a global economic slowdown triggered by lockdowns and travel bans.