Gold as a safe haven – for many investors this was considered a foregone conclusion for a long time. But Corona is turning everything upside down: while share prices are falling worldwide, investors who have gold in their custody account see deep red developments. But experts don’t believe it has to stay that way.
Securing the crisis was the order of the day for a long time. Many investors have implemented this strategy through gold investments. But during the corona pandemic, which is likely to trigger a recession worldwide, hedging strategies with the precious metal do not work. The gold price is also captured by the panic crisis of investors who are currently cashing everything they can cash – including their precious metal investments.
Central banks should support gold
However, even if gold prices may continue to fall in line with the markets for a longer period of time or at best move sideways, this does not have to remain permanent. On the contrary: Current developments, particularly in the monetary policy area, could certainly get the gold price back on its feet.
Because the central banks continue to flood the markets with money, in order to cushion the economic consequences of the corona pandemic, this will have a positive effect on the development of the gold price. As in the past, stocks, real estate and gold are likely to be more profitable in the longer term, said precious metal expert Siegel. The purchasing power of fiat currencies continues to decrease with more and more cheap money – gold, on the other hand, should play off its stable value in the medium to long term.