It’s all over the news–coronavirus cases are increasing around the world and the public is beginning to panic. The economy is taking a hit as a result, with stocks dropping and the market plummeting. Investors are far from at ease at the moment, unsure of the future of the market as a result of the spreading coronavirus. Andrew Cochineas, CEO of Pallion Group, which provides metal services, shares thoughts on the status of gold as the economy feels the effects of the coronavirus.
Mr. Cochineas notes that gold tends to be one of the less risky investment options, and some individuals believe it will not suffer greatly as a result of the coronavirus. Goldman Sachs argues that gold is resistant to the shockwave from the disease. During economic challenges in the past, the value of gold did not waver greatly, even when markets were vulnerable. It seems to Andrew Cochineas that gold can, in many cases, hold up to obstacles affecting the market.
Although gold is a more resilient investment option, the coronavirus recently caused gold prices to drop to their lowest point in seven years. The cause of this was investors and traders seeking to gather liquidity from their assets while they could, before the economy fell any further. Andrew Cochineas notes that the prices of gold are already rising following the drop. Thanks to the Federal Reserve’s slicing of rates as protection against a major economic crisis, the value of gold has grown. While gold prices suffered momentarily, the current status is promising compared to other forms of investment.
Ultimately, while wavering for a moment, gold is holding up well to the coronavirus’ impact on the economy. Major services like airplane flights and cruises are coming to a halt with rising fears of the spread of the epidemic, causing the value of involved companies to plunge. When individuals fear leaving their homes or states, portions of society shut down and are put on hold. Individuals with shares in companies that provide travel services are suddenly seeing their financial portfolios at risk. Being a more stable and immune option, gold is holding its ground for the most part, and may be a smart area of the market for investors to work with.