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TOPIC: How COVID-19 affect gold price

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Whether is increasing or decreasing
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The key point of the study includes investigating gold characteristics and how gold performing
during previous economic issues, movement of gold prices during the COVID-19 pandemic
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For example, the 2008 financial crisis, the great recession, as
well as current event COVID-19, which the price of gold achieved all-time high record
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Gold usually perform well in
critical times
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0 Brief Introduction
In late 2019, the COVID-19 virus, also known as coronavirus, is an infectious disease that
outbreaks in Wuhan, China
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The virus is similar to the last
H1N1 flu pandemic in 2009
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The pandemic has a huge impact
on the economic and financial, which caused the stock market crash in February and March
2020 since the 2008 financial crisis
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As a result, the stock price has a tendency to decline
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Investors usually
bought gold when there are a recession and financial crisis
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The purpose of this study is to investigate whether COVID-19 can cause the gold
prices to increase or decrease
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0 Problem statement
Gold is a primal and unique currency
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In other words, people acquire
this valuable, precious yellow metal in order to hedge the risk of their investments in stocks,
currency, and property
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Whenever there is an economic problem, the value of gold is not going to be affected by the
company’s poor sales, it still remains its value
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The price of gold rocketed during the period of world war 2, 2008 market crash
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As a result, higher risk in investments and lesser hedging
tools
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(Aranya, 2020)

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Investors are either
buying gold as protection from an economic crisis or inflation
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In March 2020, the pandemic created a panic for investors because the virus is disrupting the
supply chain and there are only a few consumer demands
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S&P 500 faced a dramatic plunge
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S&P 500, NASDAQ
declined more than 7
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Therefore, investors want to sell off their gold on March 11, which
caused the gold price to decline initially, losing $144
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64%) (FXCM, 2020)

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Figure 1 Dow Jones Industrial Average
The graph above represents the movement of Dow Jones Industrial Average between January
2017 and April 2020
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From April onwards, the gold price keeps rising as the pandemic situation is not handled well
in every country
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Figure 3 Gold price spiked and plunged
In August 2020, where the price of gold spiked and plunged
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21 per ounce
and created a new all-time high record since 2011
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According to Prithviraj Kothari, President, Indian Bullion,
and Jewellers Association, they stated that demand for gold is very real due to the uncertainty
of COVID-19
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Kothari also stated that people who didn’t invest in gold since 2011 are starting
to add gold into their portfolio
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(BOOM, 2020)

COVID-19 also caused the highest price difference between spot gold and futures gold, which
is $70 in March 2020
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For example,
limitations on refineries and ban on air traveling insert an inquiry about how shipments will
arrive in the US in order to fulfill contractual requirements
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(News, 2020) The expectation of vaccine
development, caused investors to decrease safe-haven assets
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Investors now planning to buy back stocks of companies that are impacted greatly by the
pandemic
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As a result, a massive drop of the gold
price to $1916
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(Tan, 2020)

Figure 4 Gold price plunged
The figure above shows that the gold price plunged, which is the biggest daily fall in seven
years
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(Anon
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Which indirectly
caused the gold prices to rise
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S
dollar contrasted to other currencies
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This will reduce demand and insert pressure
on prices of gold, gold will become lower in dollar terms
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Therefore, increasing demand and pushing the gold prices up
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Due to COVID-19, the federal also reduced the federal rate to 0
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S dollar value weakened
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0 Conclusion
Based on the finding, because of the current event, coronavirus, also known as COVID-19,
affected the world business, every place face difficulty to operate due to government policy in
order to stop the spread of the pandemic
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People acquire
gold when the economy is uncertain and not healthy, gold can help the investor to hedge their
risk when trading stock, it is a safe haven asset
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In this case, the pandemic, also caused the gold
price to spiked and achieved all-time high record, $2069
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COVID-19
also affected dollar value and caused it to decline, which indirectly affect spot gold price
because it is exchanged with the dollar
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, 2016
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[Online]
Available at: https://www
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com/knowledge-center/how-do-gold-prices-affect-theeconomy
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Aranya, H
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Gold eases as economic recovery hopes boost risk appetite
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theedgemarkets
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BOOM, 2020
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[Online]
Available at: https://www
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in/videos/fact-file/why-gold-prices-are-on-the-risedespite-covid-19-crisis-9094
[Accessed 16 9 2020]
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, 2019
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[Online]
Available at: https://globalbullionsuppliers
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businesswire, 2020
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[Online]
Available at: https://www
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com/news/home/20200519005754/en/Gold-COVID19-Outbreak-Recession-Approaches-Gold-Critical
[Accessed 16 9 2020]
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How does COVID-19 impact gold prices
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fxcm
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Greenwood, L
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Why is the gold price rising?
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cgtn
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html
[Accessed 16 9 2020]
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, 2020
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[Online]
Available at: https://www
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com/news/world-europe-53735718
[Accessed 16 9 2020]
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S
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L
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, 2020
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S
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[Online]
Available at: https://finance
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com/news/global-markets-asian-stocks-slip062107812
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tsrc=fin-srch
[Accessed 16 9 2020]
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, 2020
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[Online]
Available at: https://www
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com
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40
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Tan, W
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Asia markets pare losses as investors watch for coronavirus developments;
gold prices plunge
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cnbc
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html?&qsearchterm=gold%20prices
[Accessed 16 9 2020]
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, 2020
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[Online]
Available at: https://www
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com/articles/investing/101215/how-fed-fund-ratehikes-affect-us-dollar
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