Despite the escalation of the coronavirus crisis and the emergency measures of some central banks, the gold price erased initial profits and declined. Oil prices are also falling sharply today because of Coronavirus.
Similarly as gold, other precious metals, like silver, platinum and palladium, recorded a sharp drop during the coronavirus crisis. Silver has declined most since 2013 and has approached its lowest level since 2009. The market and gold are under severe pressure. This due to the rapid spread of new coronavirus in Europe, and the impact on the economy. right now, not even the measures taken by the world’s leading central banks are helping.
North Brent Oil is declining by more than ten per cent during the coronavirus crisis. It is just over $30 a barrel. US light oil West Texas Intermediate (WTI) fell below $30 per barrel, and it lose around eight per cent.
Gold and Coronavirus
Gold last week showed the highest weekly slump in more than three decades. The new week started with a growth of about three per cent, but later erased profits and began to decline. Investors do not have enough money to buy gold because of coronavirus.
The gold market is now struggling between the demand for safe investment. On the other hand, the investors’ efforts are raising cash to cover losses from other markets. Last week, as Bloomberg pointed out, the price of gold fell by 8.6 per cent, the highest since 1983.
Silver and Coronavirus
Today, Silver fell by as much as 13%. It touched the lowest level since 2009. Before noon, the price of platinum showed a decline of 10%, the price of palladium fell by up to a quarter. Both metals are essential for the production of automotive catalysts. It has big similarities to the gold situation during the coronavirus crisis.
Central banks around the world are trying to take more steps to limit the impact of the spread of the disease caused on the economy by the new coronavirus. The US central bank (Fed) has cut interest rates, and on Sunday, it promised bond purchases for the second time in less than two weeks. The main interest at the extraordinary meeting was also reduced by the New Zealand Central Bank, while the Japanese Central Bank increased its asset purchases.
Gold and Coronavirus Analysts
Analyst Ole Hansen of Saxo Bank said gold’s interest rate cut is still subdued. But in the medium and longer-term, the Fed’s decision could support the price of gold. Hareesh V, analyst at Geojit Financial Services, said that the decrease in interest suggests that the economy is slowing down, and that the negative effects of coronavirus spread will continue.
The fall in metal prices also lowered producer prices. Silver miner Fresnillo has fallen the lowest since 2009.