How gold became an “essential” asset during a pandemic
In 2019, speculation was rife that gold would hit the $2,000 mark and maybe even get to $5,000. Over the last two years we have seen the price of gold go up. It didn’t just happen a few months ago when the little known Corona Virus that originated in China would birth a global pandemic. Gold has been rising steadily over the last five years, actually. While speculations and predictions were being bandied, the ordinary man on the street who had no gold bullion stored in a vault could find some solace in the knowledge that the little gold jewellery he has could prove to be valuable.
Covid-19 might have been the tipping point for the gold price but the pandemic Isn’t the only thing that fuelled the price of gold. Like most things, Supply and demand play a major role. If supply outstrips demand, the value goes down. However, this time around the supply was low, not only because there is less gold to be mined but because the measures taken to curb the spread of the virus made transporting gold where it was needed. And since mined gold and reclaimed gold has to be refined, the closure of some refineries affected the supply.
You would have thought people would be concerned about stocking up on essentials and forget about buying gold in any form. Savvy investors do not look at current situations, they look to the future and by all accounts history has taught us that we could get through most disasters but it is hard to get through a recession.
Since gold serves as a stable currency platform when economies become degraded, it makes sense to buy gold in times like these.
As countries like Australia faced the prospect of a degrading economy and a recession the gravity of an uncertain future pushed the demand for gold high. However, refineries have been operating at below capacity and mints haven’t produced as much gold bullion as they should have. Investors have had to find different sources for their gold and gold dealers Brisbane have had to come up with new ways to bridge the gap that the supply and demand disparities have caused.
As early as March 2020, analysts were beginning to see money flowing out of risky assets as a result of the economic pressure due to the Corona virus. Consequently, the price of gold had risen by 2.2% in that time.
Australia has previously shown influence in gold prices increasing with interest rate cuts by the Reserve Bank of Australia. The RBA had to cut its rates in response the coronavirus but this bolstered the price of gold.
More than ever before, buying Gold bullion as an investment has proven to be the smart thing to do in the face of economic instability. Looking can help investors understand how healthy global trade is and what is likely to happen in the face of a global disaster. If you have clue, the best thing to do is to ask someone in the industry. Gold is a fascinating metal. In your research your quest to find the best gold dealers Brisbane you will come across some more intriguing facts about gold and its history.