Growing pandemic uncertainty and rising coronavirus cases across the globe have made gold a ‘weapon of choice’. Investors are beginning to lose hope in the stock market, speculating and hoping as they go. Their lost confidence in governments and their policies is evidence in the climbing prices of gold. Gold prices have reached their highest in nearly nine years as investors flock towards gold for a haven in these unprecedented, chaotic times. As Moy, chief strategist at gold retailer Valaurum, says, ‘This has caused a flight to safety and fear of inflation, which has benefitted gold.’
Gold has effectively breezed through the $1,800 mark and is enjoying a recent high. The gold futures market has tapped a high of $1,829.80 an ounce. Futures have not traded or settled at such high prices since September 2011, with a record intraday level of $1,923.70 an ounce, documented on 6th September 2011.
“The weapon of choice has clearly been the gold ETF”, according to the World Gold Council as global net flows of gold-backed exchange-traded-funds reached $39.5 billion rising above the previous annual inflow record of $23 billion in 2016. The head of research at the World Gold Council, Juan Carlos Artigas, stated, “Gold ETF investment demand shattered numerous records this year as investors sought safety from the economic turmoil created by COVID-19.”
Present-day protests and movements, riots and continuing unrest, and the upcoming US presidential elections have cast an overshadowing sense of fear and apprehension over the global community. While this may prove critical for the stock markets and the US, it has proved gold for gold prices. As unrest continues to grow and people grapple with a second wave of the virus, learning to adapt and live through a global economic storm, gold prices are destined to soar higher, breaking their earlier set records. The long, uncertain road to recovery has pushed skeptical investors to invest in gold online. With the pressure of liquidity and inflationary crises, gold hedges investor portfolios from financial risks. Due to the prevailing pandemic and spreading coronavirus infections, the global lockdowns caused governments to partially or fully shut down their mints, where precious metal bullions and coins are produced. This caused significant disruptions in supply from manufacturing plants, resulting in some downward pressure on gold prices. However, it is expected that gold prices will continue to rise into the foreseeable future as tensions in the global market persist.