Global Coronavirus – Covid-19 Crises: Protecting your wealth with Gold
The global Coronavirus crises already created global financial damage, and the damage does not seem to as it is currently. Interruption of global delivery chains, cancellations of exhibitions and an global travel limitations seem to continue for a while. It is again gold that appears as safe haven and preserves wealth.
Since the outbreak of Covid-19 on 12th of December 2019, gold gained 12,05% until now (3rd of March 2020 at 06:02 pm GMT; the gold price being USD 1.647,14,) while, for example, S&P500 lost 2,43%.
JP Morgan slashed global GDP 1Q20 by 50%
On 20th of February, JP Morgan slashed the global GDP growth forecast by 50% for 1Q20, from 2,6% to 1,3% annualised rate. A global GDP decrease of 1,3%, as forecasted by JP Morgan, translates to a global damage of about USD 886 billion.
JP Morgan revised China’s GDP 1Q20 down to 1% quarter-over-quarter when seasonally adjusted, down from a pre-virus forecast of 6.3%. China is the world’s largest economy. It produces raw materials, raw products and end products for the entire world. The key position of China becomes more comprehensible if you look at the production of antibiotics: almost the entire raw material for the global manufacturing of antibiotics is produced in China.
China is also important as a market for all major global producers. The harsh anti-virus measures in China has its price, local consumption decreased dramatically, car sales are down by 25%.
Gold gained 27% during the SARS crises 2003/2004
The SARS epidemy in 2003 caused a global damage of USD 40 billion, while the Coronavirus already caused by far more tragic deaths than SARS. During the SARS crises, gold gained 27% value and continued gaining until today.
Gold remains as a reliable preserver of wealth on the long term. Regardless the current virus crises, the fundamental weaknesses of our global markets remain unchanged. That’s why Citibank sees gold topping $2,000 in next 12 to 24 months, and Citibank is only one of large wealth managers sharing this opinion.
Since months, gold buyers are heavily purchasing gold at increased quantities. While some gold buyers are speculating on the short-term increase of the gold price, other buyers focus on long-term asset protection and thus buy physical gold that they store safely in private vaults in custody.
We do not offer investment advice:
This information is provided solely for general information and educational purposes. It is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, or as investment advice in general.
