Investing in Gold in the Coronavirus Era
We’re in a time of crisis; a global pandemic is hitting the world by a storm and it’s uncertain when the Coronavirus is going to end. While everyone is taking delicate cautionary steps to overcome this pandemic, the global economy is facing hard times.
According to past economic recessions, what’s common between them all is that consumers inevitably try to find the optimal investment option to invest their money for a period of time without losing any value. But still, the question that’s on every investor’s mind is: what’s the safest investment option?
The debate between investing in gold, compared to investing in other options is endless; hence, the question remains: is the precious metal the optimal investment option in the times of Covid-19?
Gold Outperforms During Coronavirus Crisis
As investors have been buzzing for the safety of haven assets amid the recent market volatility, the U.S. dollar has been the king of the global foreign exchange market. But gold is actually outperforming against the U.S. dollar.
Investors and speculators in gold have not forgotten what necessary stimulus programs mean for gold prices. Basically the world is printing money and that devalues paper currency. Meanwhile, the supply of monetary metals remains almost static, and so their price goes up.
Image courtesy of Economics Help, https://www.economicshelp.org
The Performance of Gold in Previous Crises
Gold's recent bump is similar to what happened in 2008, when gold also acted as a safe-haven asset standing against the U.S. dollar. The turning point for gold in 2008 came when the Federal Reserve announced quantitative easing, at which point the metal began to soar.
Gold-buying apps, which allow customers to buy and use gold for everyday spending, are seeing record purchases as investors flock to the safe-haven asset amid violent market swings on fears of a coronavirus-fueled global recession.
Gold Proves to be the Safest Investment Asset
The price of gold shot up from the start of the year and is expected to keep, unpredictably, rising throughout the end of the year, or at least until it’s confirmed that a cure is found. Gold prices have witnessed at least a whopping 26% increase from the start of 2020 until today, its highest since 2012 and many forecasting further rises as investors search for safe places to put their money.
While it’s still uncertain to say that gold is safe from the upcoming economic recession, it's sure that it’s the safest option to invest in with minimal damages to the value of your investments, even increasing it over time.
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