Gold Is Immune to The Coronavirus, Says Goldman

The comments below are an edited and abridged synopsis of an article by Birch Gold Group

After two successive upgrades to their gold price forecast, Goldman Sachs has released yet another note that is highly supportive of the metal moving forward. Jeff Currie, Goldman’s head of global commodities research, said that gold is immune to the coronavirus in both figurative and literal senses.

Gold Is Immune to The Coronavirus, Says Goldman | BullionBuzz
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Currie has little doubt that the uncertainty that’s currently gripping the markets will continue as the coronavirus spreads and begins to take its toll on the global economy. In this environment, gold may be one of the assets—if not the only asset—that investors can truly rely on regardless of how the crisis progresses.

Currie highlighted the fact that gold was up roughly 5% since the start of the year at the time of publication, a stark contrast to the S&P 500’s decline of more than 8%.

Along with acknowledging that gold is the safest bet for investors in this ever-changing climate, Currie also noted that, should concerns over the coronavirus escalate to a point where paper currencies are seen as transmitters of the disease, gold stands to benefit even more by providing a safe medium of transfer.

Although gold’s outperformance over the past nine months can be attributed to numerous factors, the dovish turn by central banks around the world in the second half of 2019 could be singled out as the most potent driver. The Fed’s three rate cuts, along with those from other central banks, helped push gold to levels last seen in 2013.

Now, as the coronavirus crisis unfolds, central banks have positioned themselves to be gold-price drivers. Despite a rising interest in havens, gold recently came under a sharp selloff as coronavirus-related panic gripped the markets.

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