Gold prices have risen to their height since Friday, March 9, boosted by grim U.S. weekly unemployment claims figures, underlining the pandemic’s broader economic effects.
The Fed unveiled a massive $2.3 trillion stimulus plan in March in an attempt to hold the economy stable in the wake of the crisis which had caused 16.8 million people to apply for unemployment insurance since March 21.
In light of these developments, traders are finding ways to take advantage of the price movement of this precious commodity. While most are into trading, some are exploring into buying or selling of eToro gold contracts.
Impact of COVID-19
Gold, coveted as a haven by investors in times of crisis, is facing rising demand from both commodity traders and retail buyers in the face of the coronavirus outbreak. This month the precious metal had reached a seven-year high on commodity markets as traders were searching for protection from the COVID-19 pandemic and its devastating economic effects. The asset has also rattled as creditors try to protect against increasing inflation — with several central banks pumping vast sums of cash into the financial system to combat virus runoff. During the past three weeks, as the latest coronavirus strain spread around the globe, Gold Avenue witnessed more selling than across the entire final quarter of last year.
Many firms face other challenges that exceed the overwhelming market rate. Although the biggest issue is administrative — as the coronavirus epidemic requires too many flights to be postponed. Nonetheless, consumers also have the option to store their gold coins and bars in safes — as trading firms frequently provide these storage solutions. And if they do like the beautiful precious metal to be shipped directly, then consumers face the risk of a lengthy wait.For more information related to coronavirus please click here
US-based online bullion dealer JM Bullion has alerted its consumers that the “strong order sizes” would trigger delays of more than 15 days. — Lock-down refineries – Gold has already risen in the London Bullion Exchange to hit a high of $1,703.39 an ounce which happened last in December 2012. Since then, it has declined on moderate profit-taking but stands at an elevated pace of about $1,600. That kicked retail prices in the pants — and demand shows little indication of declining from the latest coronavirus strain reaching 200,000 this week after the global death toll.
Markets worry precisely how badly the spread of COVID-19 will affect the U.S. and Europe — the two areas where the virus struck very hard. And as the Federal Reserve seems steadily poised to slash rates to nil all in one go next week, economists claim it might be a perfect time to purchase gold.
Gold couldn’t stop this week’s colossal market sell-off, which intensified in March when U.S. stocks reported their worst day since 1987. Gold was prey to margin-calling when creditors were pressured to sell their gold shares elsewhere to compensate for damage.
Conclusion
Gold prices have skyrocketed because of the COVID-19 pandemic, and they aren’t coming down. Smart traders have bought gold when they saw the worsening condition of the world and are now storing them in safes. It might be a dull move but people are still purchasing gold in the bulk because of a slight chance of it increasing further. No doubt cash won’t hold much worth after this is over; it is in one’s favor to buy smart and sell fast.