Covid has literally changed the way the world used to function and the gold market is nothing different. The first half of the year right from December 2019 to June 2020 is that time when gold gained around a 16% rise from $1515 to $1762. The beginning of 2020 was a positive start for gold prices. It actually shot up in rates in February without worrying much about COVID.
After an initial correction at the end of February, the gold rate jumped to around $1684 in March as an aftermath of the FOMC meeting. Later, when the acute part of the global stock market took place and investors started selling everything for cash, the gold’s rate dropped down below to $1500 as of March 19.
With such a rapid coronavirus spread out, along with accommodating the response from Fed and adding the economic lockdowns, the rates of gold prices were pushed to $1740 during the middle of April. There used to be a sideway trend with yellow metal trading, which used to range between $1680 and $1750 till the end of June. At this time, gold’s rate was at the highest.
The economic damage can be seen along with the market sentiment:
April 2020 was pretty tame for capital markets if compared to Match 2020. The broad-based recovery at that time was a risk asset where the investors and equities traders gained a portion of their current appetites. Other than this unfortunate tumult hitting the oil complex globally, April was a better month for sure. However, there remained a good question associated with gold trading Singapore and economic re-start, which literally plagued the entire market’s sentiment.
Business shutdowns and citizen quarantines were in place for an extended time. So, it was difficult literally to resume life after COVID.
The projections and ultimate economic restart:
When it comes to the economic sector, most of the analysts predicted nothing but a steep recession with depression after COVID 19. Some of the experts from investment banking issues Mid-April projections for around Q2 U.S. GDP, which will decline by 11% and the unemployment rate in America hitting hard by 15%.
- This ominous situation was not just consigned to the USA only, as the IMF estimated that the global economy was to actually contract by around 3% for this year 2020.
Even though there was a recovery already going on in the financial markets right from the match, but there was a huge concern among investors for a long time.
With the world largely running on lockdown at that time, bullion was a bit higher during April. For April, the XAU/USD gained to be around $109.51 with a robust close of around US$1686.61.
Perfect economic restart:
- Be part of the gold trading company in Singapore to learn more about how COVID affected the gold market. The gold’s attitude did not change much as the global economy started reopening its doors. Even though the early part of this year went through the COVID pandemic, gold was considered to be global finance throughout.