Home / Business / The Beirut explosion also shook world markets. Investors buy gold, oil becomes more expensive

The Beirut explosion also shook world markets. Investors buy gold, oil becomes more expensive

On Tuesday, for the first time in history, the price of gold exceeded $ 2,000 (approximately 44,400 CZK) per troy ounce (31.1 grams). A massive explosion in the Lebanese capital Beirut helped record gold prices. Experts agree that the price of gold continues to rise. Rising prices also affect silver and oil.

According to Bloomberg, the price of gold rose to $ 2009.61 per troy ounce on Tuesday. Just before 21:00 Central European Time, it was close to $ 2005, an increase of about 1.4 percent compared to Monday.

The explosions in Beirut, Lebanon, which severely damaged much of the capital of the Middle East metropolis, contributed to the rise in the price of gold.

It has grown by almost a third since the beginning of the year. Gold benefits from interest rate cuts and other stimulus measures through which central banks try to help the economy overcome the negative effects of the coronavirus. Low interest rates reduce the disadvantage of gold compared to interest-bearing investments such as bonds.

Demand for gold is also currently supported by the continuing deterioration in relations between the world̵

7;s two largest economies – the United States and China.

Analyst: The price of gold continues to rise

Investors consider gold to be a haven in times of economic or political uncertainty. “People want security, and right now security is gold,” said Bob Haberkorn, an analyst at RJO Futures, according to Bloomberg.

In July, the price of gold rose by 11 percent. It thus registered the sharpest monthly increase since 2012.

Experts agree that the price of gold will continue to rise and reach well below $ 2,000 per troy ounce. According to Golden Gate CZ analyst Marek Brávník, gold goes to $ 4,000 per ounce over a period of five to seven years.

The Czech fund’s chief analyst Lukáš Kovanda also expects increased demand for gold in the future. “A further increase in the price of gold up to 2500 dollars per ounce can not be ruled out. Or now also the Middle East,” comments Kovanda.

The explosion does not only affect gold

The silver price also rose to a multi-year high of about $ 26.20 per gram in response to the Beirut explosion.

“Like gold, investors around the world consider silver as a so-called safe haven for times of fundamental geopolitical, economic or other uncertainty. Gold and silver are estimated at about thirty percent this year,” says Kovanda.

Oil is also rising in price. Brent crude is now trading close to $ 45 a barrel, almost the highest since the beginning of March and the outbreak of the coronavirus crisis.

Cryptocurrency bitcoin is also growing. It is supported by the weakening of the dollar, the withdrawal of money from central banks and the threat of significant inflation. “Currently, the value of bitcoin is about $ 11,300, in terms of about $ 250,000. Investors see gold and bitcoin as an alternative to traditional currencies, and in the coming crisis they will invest many times more in these commodities,” he says. Bitstock.com founder Martin Stránský.

It is still unclear what caused the explosion, which triggered quakes comparable to a magnitude 3.5 earthquake. Lebanese Prime Minister Hassan Diab said lots of ammonium nitrate had exploded and been stored in the port. US President Donald Trump said without further details that according to US military experts, the cause was probably a bomb attack.

A massive explosion in Beirut, Lebanon has been captured by a number of passersby Video: Reuters

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