Gold Gains Traction as Coronavirus Causes Concern

A noteworthy milestone rocked the precious metals community this week as gold hit $1600, a price not seen since 2013. After the US airstrike in Iran back in January instigated a market decline, concerns over the recent COVID-19 epidemic in China (also known as Coronavirus) put further strain on stocks. Therefore, investors now turn to a more secure, “safe-haven” asset: gold. 

Historically Stable 

Considered a solid investment option for hundreds of years, gold populates many portfolios all over the world. One of the oldest methods of currency exchange known to man, gold holds a unique position as both a currency and a commodity. Since February of last year, gold gradually rose over $300 per ounce and shows little indication of slowing.   

Certain Stocks Suffer, Others Thrive

The Coronavirus outbreak is affecting many companies with factories located in China. Specifically, some companies find themselves suffering significant losses in the market. For example, Apple derives 15% of its revenue from China, and recently reported its concern about meeting their second-quarter financial goals. Because of this news, they suffered a 3% loss in the market this morning. Despite the anxiety surrounding stock prices, many companies continue to succeed. US Company stocks have generally thrived even though China-related trades continue to struggle. 

Unusual Correlation

Normally, when the stock market trends upward it inversely affects gold prices, and vice-versa. The recent market news draws attention because both stock prices and gold prices are steadily going up. This unusual development indicates a belief that China will be able to contain the coronavirus, which will stimulate stock market growth. Pundits remain unsure how long this positive climb will last, but they assume one trade will soon start to fall.

What’s Next for Gold?

Peter Spina, CEO of GoldSeek.com, hypothesizes gold might hit record highs of $1900 an ounce in the coming months. However, this heavily depends on the ability of this precious commodity to breakout and greatly surpass $1600 in the coming days. If gold prices fail to breakout, Spina theorizes, prices will likely consolidate around $1,500.

Similar Patterns Emerging

Besides gold, other precious metals find themselves in a favorable position. Silver prices are expected to climb higher over the next several months. Palladium and rhodium both continue to achieve record heights on the charts due to increased demand from the auto industry. Conversely, platinum shows signs of a steady decline. However, many analysts believe this trend may not last long-term. Overall, many precious metals investors are choosing to capitalize on the recent upward trend. 

Investment Opportunity

Bullion Exchanges is a trusted precious metals retailer located in Midtown Manhattan. We offer a wide array of quality products from mints across the globe. Looking to invest in gold? Explore our selection of Gold American Eagles, Gold Canadian Maple Leaf Coins, and Gold Britannias. Also, peruse our inventory of gold bullion bars, which make wonderful additions to any precious metals portfolio! If you have any questions regarding our products, please reach out to our helpful customer service team.

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