As the world struggles to stem the rise of Coronavirus that threatens to become a pandemic, the virus seems to have caught the world’s stock markets. As the news of rising number of fresh infections outside China came to the fore, the US S&P 500 tumbled by more than 10% in a week, UK’s FTSE 100 by more than 11%, France’s CAC 40 by approximately 12%, Germany’s DAX by more than 12%, and our own Nifty tumbled more than 7%. Sentiments were further rattled when Moody’s opined this week that Coronavirus fallout could trigger a global recession.
Usually, it is said that every dark cloud has a silver lining, but this one seems to have a gold lining! With the outbreak of Coronavirus in China and the previous Iran-US tensions, Gold prices seem to find a steady trajectory on the upside. The yellow metal is shining once again! This of course was expected since risk-averse global funds often find a safe sanctuary in Gold when serious issues threaten the stability of stock and bond markets. This is nothing new.
Let us take a look at the chart of Gold.
Clearly, one look at the chart and it is very much clear that Gold has been rallying strongly since August last year. Given a situation with the spread of Coronavirus it seems unlikely that this strong rally is going to die down very soon. So are we looking at Gold nearing 2000 levels in the near future? Who knows!
- Contact
Comment here