Why is Gold Increasing in Price?
Aug 27, 2020
Why are gold prices rising? Should investors be concerned with the change in gold price? Is it safe to invest in gold when it is more expensive than normal?
Due to Covid-19, since March 2020, most countries had to implement nationwide lockdowns. Although this approach reduced the spread of the virus, it also destabilized the worldwide economy. Businesses were shut, meanwhile exports and imports were drastically reduced.
Although many governments provided support packages for certain businesses and entities, interest rates dropped heavily and investors started to look for a backup, hence increasing the demand in gold.
Since the primary factor in the formation of prices is the supply and demand. With the escalated demand, gold mining activities were severely impacted due lockdowns, causing the prices to spike even more.
As a result of increasing number of coronavirus cases, intensified tensions between countries, international economic slowdown created continuous boost in gold assets.
Is it worth it to invest in the precious metal during this period? Analysts are predicting that this pandemic period will have a lasting impact on the market. Moreover, the increase will continue until an effective vaccine is introduced to the world, hence keeping the investors interested in the metal for long-term.