Gold is currently experiencing a new price high since 2011. This increase is fueled on grounds of possible measures to help curtail the new rising cases COVID-19.
The price of gold has appreciated and its currently selling above $1,800 for the first time since its last boom in 2011. Gold stands as one of the world’s most important metals on earth which became regarded as a means of keeping assets over time. The current price increased was fueled as a result of increased demand owing to the possibility of a resurgence of COVID-19.
The place of gold as an investment alternative has been reinforced in the past few decades and also in the wake of the coronavirus pandemic. Investors resorted to gold as the global stock market crashed with most businesses posting losses with a bleak future upshoot. As the current COVID-19 in the world crosses 10.5 million, with rising daily cases been reported, another round of market crash is likely and investors are looking to gold for the right cushion.
Can Gold Really Safeguard Investments?
The year 2020 has been marred by COVID-19 which has caused an inflationary rise of about 20%. Further negative plunges are imminent which could make the current recession more severe. The gold price has added gains for three successive futures session with the August session settled at $1,800.50/oz on Tuesday. Gold touched an all-time high back in September 2011, with futures rising to $1,923.70 and spot metal advancing to $1,921.17.
While the views on the potential of gold as an investment class differ among investors, gold can be well tagged as a safe-haven investment during times of economic recession and a worthwhile store of value during expansionary periods. 2020 is both and before now, Tyler Gallagher wrote in Forbes predicting a bullish turn for gold in 2020 due to the peculiarities of the year. There are several things to consider as an investment in gold can be tricky and investors are encouraged to make their research based on current market realities before investing in the precious metal.
The subsequent value attached to gold is dependent on the fate of the economy which is determined to a very large extent by the coronavirus. From general observations and calls from the World Health Organization (WHO), there might be a need for new measures with the increasing cases and the lack of a unifying approach to combat the virus by various governments.
Gold Applications
Since the early discovery of gold in the early times, it has found a very wide application beyond its monetary value, all of which contributes to high value. Gold serves as one of the most important metals for jewelry production. Because of the softness of pure (24k) gold, it is usually alloyed with base metals for use in jewelry, altering its hardness and ductility, melting point, color, and other properties. Gold also find uses in electronics and medicine, with more ongoing research to discover more use cases for the precious metal.
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