Gold broke the all-time Sterling record today as investors continue to clamour for the safe haven metal, and there could be further gains to come according to many analysts.

The second largest banking institution in the United States, the Bank of America Corporation, speculates the gold price could reach $3,000 per troy ounce in the next 18 months. The Bank of America, which also operates Merrill Lynch for wealth management and financial services, published a 15-page report into the economic effects of the coronavirus. A report that reiterated the need for gold in diverse portfolio.

Turbulent markets have seen gold prices rise this week as the true economic impact of Covid-19 became clearer. It is likely that governments will need to spend more and more money to bolster their national economies through the crisis.

In the US, the House of Representatives is ready to pass the latest coronavirus aid bill on Thursday. It paves the way for nearly $500bn more in economic relief amid the pandemic. The EU is also expected to pass a new €540bn fiscal package today, following some tense negotiations between richer and poorer members.

In the UK, the Debt Management Office said it plans to issue £180bn of government debt between May and July. This is more than it had previously planned for the entire financial year.

To pay for all this spending central banks will likely be forced to print money. More money inevitably means inflation. In a world awash with currency, including US Dollars, the total amount of world gold will remain constant, and this explains the Bank of America's report, aptly titled “The Fed can’t print gold”.

The price of gold today, showing the new Sterling record.

Current gold price charts give further credence to the Bank's speculation. Today the gold price hit a new all-time high in Sterling of £1,405.32. This also marked a new high in Euros of €1,607.71. In US dollars gold hit $1,735.91 moving it closer to the all-time Dollar high set back in 2011.

Gold has a history of holding its value in the worst of times. Fearing the prospect of recession and inflation, it is little wonder investors have turned to the precious metal safe haven to protect their wealth.

During the financial crisis of 2008, it took three years for gold to reach its peak in 2011, and analysts fear the coming downturn as a result of Covid-19 will be far worse. Jan Vlieghe, a member of the Bank of England’s interest-rate setting committee, gave this stark warning in a speech today:

‘Based on the early indicators, and based on the experience in other countries that were hit somewhat earlier than the UK, it seems that we are experiencing an economic contraction that is faster and deeper than anything we have seen in the past century, or possibly several centuries.’

It is the fear of this crisis that has many analysts forecasting gold prices climbing far beyond the $2,000 per ounce mark, and the Bank of America’s forecast of $3,000 per ounce is considered to be feasible considering the soaring demand of recent weeks.

The unprecedented global situation makes forecasting as difficult as ever but considering gold more than doubled its value during the last financial crisis, then even matching that performance would certainly see gold hit the $3,000 per ounce mark. The stage is certainly set for a new bull run for gold unseen for a decade.