Gold on track for its best quarter since 2016, flirting with key US$1,800 an ounce level amid coronavirus, other uncertainties

Gold has been on fire again, itching to reach a key US$1,800 an ounce resistance level as it heads toward recording its best quarter in four years.

The safe haven has gotten a boost from uncertainty around the coronavirus and the world’s economic outlook, among other factors, sparking investors to pile into gold-backed exchanged traded funds (ETFs).

So far this year, gold has risen nearly 17 per cent to US$1,771.29 per ounce. It is trading at its highest levels in more than seven years.

Reaching US$1,800 would be significant, because after gold peaked in September of 2011 at US$1,921.17 per ounce, it tested the $1,800 resistance level three times but could not reach it.

“We advise gold investors with a strong orientation towards equities to stay long the metal,” Credit Suisse’s chief investment office said in a written response to questions about gold’s outlook.

“During the current the coronavirus pandemic and in prior crises, gold has been an effective diversifier and risk reducer in balanced, growth or equity oriented portfolios. We believe these portfolio properties still justify a thematic gold allocation in a portfolio despite our forecast of limited returns for the yellow metal in our base case,” Credit Suisse said.