Covid-19 And Its Impact On The Gold Price | Indiagold
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COVID-19 and its impact on the Gold price

India is the largest consumer of gold in the world and accounts for a quarter of the world’s total consumption of gold. India uses gold primarily in the form of jewellery and also for investments. Gold rates change daily depending on many factors. These include the demand and supply, global market conditions, and currency fluctuations in the country. 

So what about the current pandemic? How does the COVID-19 virus affect gold prices? Let’s try to figure that out.

COVID-19 isn’t the only cause of a dramatic increase in the price of gold, but the lockdowns across the globe have also pushed prices. Add to that, the US dollar index also plays a major role in deciding the price of gold.

During the pandemic, there was a lot of uncertainty surrounding people’s businesses and other forms of investments. Due to this people started shying away from risky investments and putting their money in safe assets like gold. 

Gold prices being directly correlated with the risk perceived by the markets, the news of the COVID-19 vaccine, caused the investors to start feeling more secure and also putting money in traditional assets. 

Every news of COVID-19 vaccine brings in the hope of the dismissal of this virus and the price of the gold shows a dip, but gold prices have always rebounded given the rising tally of COVID-19 infections. The market optimism towards the vaccine and risk-on sentiment has faded.

Although Gold prices are under pressure because of COVID-19 vaccine news, there is still uncertainty around how soon it will be available to the general public and how effective it will be in the long term. Considering this, the dips in the gold prices make for an opportune time to buy gold.

Data shows how gold’s returns have been higher than those for the S&P 500 index in longer terms. Quoting the famous J.P Morgan – “Gold and silver is money, everything else is credit.” 

So keep calm and save with GOLD 🙂

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