The corona cases are spreading at a faster pace all across the world. And among all other countries of the world, the USA is in most vulnerable situation holding the highest number of active COVID-19 cases. Thus, creating a financial emergency like situations and as a result of which the entire world is seeking safe assets and the demand for gold is increasing. It will further increase in the future.
The current price of gold is Rs 46,590 and experts suggest that the prices are likely to cross Rs 50,000 in the next 3-4 months as there are doubts about the progress in developing a treatment for COVID-19. In a holistic trend, the hike in the price remains bullish and a climb above $1,730 would open space for the price to test $1,747.
There are various factors for the rise in gold prices amidst and after the COVID-19 crisis.
Gold is considered to be the best investment during economic uncertainties. As gold by itself does not produce any economic value but it is a tool that can be used against inflation. Also, it is more liquid when compared to real states or any other debt instruments. Many central bankers have also started adding this yellow material to their reserves. As per the World Gold Council’s February 2020 data, RBI also started buying gold after a long gap and it is setting a trend for the normal public to do so.
Another factor to be considered from the near-term perspective is the currency. The rupee has lost its value drastically since the spread of COVID-19 and may soon, in extreme cases depreciate further per dollar and the prices may move up to Rs 50,000 per 10 grams of Gold.
The gold trend will further depend on the current geometric rise of infection as the rise in the cases will block the supply chain but the demand for gold will not be blocked. Analysts in the market feel that gold could now overtake the previous peak of around $1900 per ounce.
According to the experts, economic recovery is expected in late 2021 only, until then everyone will look for safer assets, and gold is on the top of the list.