In a scant few months, the novel coronavirus has taken much of the world by storm and global financial markets are reeling in response. However, gold is doing the exact opposite.
Its flourishing stands in direct contrast to what the BBC has reported on companies like Nike and Apple, “which do major business in China and rely on it to make goods, [and] were some of the hardest hit, with shares down more than 4%.” Russ Mould, investment director at AJ Bell, stated “Markets initially wobbled in January, but had quickly bounced back, implying that investors didn’t see the coronavirus as a serious threat to corporate earnings.”
Now those very markets are falling at startling rates due to the alarming spike in coronavirus cases around the world. At the time of publishing, official counts place the number of infected individuals at 119,000 across at least 104 countries. 4,286 people have died.
On the case of gold amidst this upheaval, Citigroup remarked “[this] will prompt investors into the so-called safe haven asset, to hedge against the stock market failing.”
As a result of these market failures, all eyes are on gold as the precious metal is shining more brightly than ever.
Bloomberg’s Justina Vasquez writes “[gold] prices neared a seven-year high” amidst “the economic fallout from the coronavirus.” Citigroup even went so far as to predict the precious metal “could climb to $2000, breaching its previous record.”
Bullion generally speaking is winning on all fronts, and understandably so. Goldman Sachs stated “the commodity has immunity to the virus,” and money manager Jeffrey Gundlach remarked “gold is the best thing to own now and is headed to new heights.”