All forecasts and opinions on 27 January 2020

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27.01.2020
Gold futures on Monday continue to rise amid coronavirus outbreak in Chinese city of Wuhan. The price went almost to $1586/toz testing last week's highs at $1588.1 recorded on Friday. Gold traditionally acts as a safe haven for investors when risks are on throughout the market and one might consider that the rise should be steeper amid current uncertainties. Gold prices rose throughout 2019 - throughout the uncertainties with the US-China trade tensions - from $1300/toz at the beginning of the year to $1550 at the end of the year. Another high in gold price was reached on Jan.
27.01.2020
Since the global financial crisis (GFC) of 2008, many central banks have opted to bring their prime interest rate closer to the so-called zero-lower bond (lower limit at which interest rates cannot be lower than zero) so that they could reach their inflation target. The British economist John Hicks (1937) and American Paul Krugman (1981) have called this condition a liquidity trap - a situation where conventional monetary policy loses its effectiveness as there is no longer room for a reduction in the interest rate.
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