The entire world is suffering a lot due to the coronavirus outbreak. Businesses are coping with lost revenue and disrupted supply chains as factory shutdowns and quarantine measures spread across the globe, restricting movement and commerce. Many small to large scale industries are suffering due to its impact. Stock markets are also volatile. This outbreak has more impact on the economy and business. But, in some way, it also affects investments. People are just wondering if gold investment has also influenced due to this outbreak. Read this blog to get more information about the demand for gold. It also provides you how well to invest in gold even in this crisis.
Gold is a classic safe asset. There is around 15 – 20% rise in gold rates during these crisis times. Over the past 30-40 years, people in India are using gold as jewelry, for gifting, and as an investment. According to experts, “Investing in gold during the COVID crisis could be profitable.” Yes, it is true. People who purchased gold before the COVID-19 crisis have experienced good gains to offset the losses on the stock market. Even during the lockdown, there is a demand for gold and as an investment. This trend will continue from now to 2022 for physical gold (Jewelry, bars, coins) too. Due to this crisis, there can be rising debts and rising asset prices, which will weaken the exchange rates. Though considering all these factors, still gold remains a good investment not only in dollar terms but also in rupee terms.
Coronavirus and Gold
In the US fed meeting, it mentioned that all the assets were negatively affected except old, which is trading quite positive. As there is around six and a half percent drop in GDP growth due to the crisis, central banks are likely to maintain the loose monetary policy. The pure gold company says, “Week to week buying rises by 987%.”, this is the amount of rising in the purchase of physical gold. The reason for this is easing with lockdown conditions across the globe. The physically-backed things forms of gold are ETFs and sovereign gold bonds. The internet investments of gold include Physical gold online and Digital gold.
Owning physical gold has never really been a short-term opportunity to make money. As the experts say, the people are protecting themselves over the short term else to make some money to grow their portfolio. As there are some restrictions to go and buy gold in shops, we can observe there is a rise in demand for digital gold. This rise in online and digital gold apart from bars and coins can continue for another 1 to 2 years. It doesn’t make much sense to put the cash in banks with low-interest rates when they pay and concern, especially with inflation prospects.
So, the experts recommended to invest in gold and increase your holdings, which serves as long term investment.