The demands for gold investment during COVID-19 outbreak is surging, and it keeps going. From commodity traders to retail buyers, more people currently invest in gold.
Thanks to the coronavirus outbreak, inflation might prospectively happen. In the face of the possible global inflation, gold is the safe haven for most investors.
Alessandro Soldati, the boss of Gold Avenue, said that the gold demand has exploded ever since the coronavirus pandemic spreads. Furthermore, he stated that the telephone has not stopped ringing because of it.
Considering the phenomena, why the demand for gold is skyrocketing and, due to the rising demand, what might be the challenge the industry has to face in the not-too-distant future?
Why Demand for Gold is Increasing during COVID-19 Outbreak
Aside from medical sectors, the COVID-19 has been affecting various other sectors throughout the world, including economy and business. Regarding its massive effects, the virus is threatening the economic stability of countries around the globe.
With such disturbance in global economy, a rising inflation is seemingly unavoidable. In the midst of price volatility, gold has always been viewed as a safe haven by many investors, a guard to protect the wealth against the rising inflation.
“Notwithstanding recent price volatility, I believe gold is as relevant as ever and will play an increasingly important role in investors’ portfolios in the years to come,” said WGC chief executive David Tait.
The Possible Challenge for the Gold Industry
Indifferent from other industries, gold might also face shortage. This is so even if the industry is not having such problem at the moment. But the situation might change at an unpredictable moment.
Switzerland-based gold refining giants PAMP, Valcambi and Argor-Heraeus temporarily stopped operations at the request of the government. The three refiners contribute to one-third of the global gold productions.
“The industry as a whole is affected by lockdowns at key facilities,” said Gold Avenue chairman Omar Liess.
Writer: Doddy D. Wahyuwono