Gold Prices skyrocketing due to Covid-19 Pandemic

Investors usually invest in gold as it is one of the conventional forms of investment. Gold prices are surging in India and US, due to Covid-19.

By · Aug 11, 2020 . 6min read

Gold price increases
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Investors usually invest in gold as it is one of the conventional and safest forms of investment. Buying gold was always a preferred means of investing, before deposits, mutual funds, etc. came into existence. There are times when inflation rates are high in an economy. When the interest rates are high, gold acts as a perfect hedge since changes do not influence it in the value of the currency. Gold prices are surging due to Covid-19 pandemic.

Gold Prices Rise in the U.S.

Gold has topped $2,034 for the first time as traders view safe havens in the Covid-19 pandemic. With the rise in Covid-19 cases in the U.S., investors have transferred cash into the precious metal. Thus, tapping more money in the global economy. Robert Toru Kiyosaki chimed in from his Twitter account with over 1.3 million followers, stating the gold prices are showing an upward trend. He also stated that S&P had an annual return of 3%. The S&P 500 is a stock market index that tracks the stocks of 500 large-cap U.S. companies. It describes the stock market’s performance by reporting the risks and returns of the biggest companies. He predicts that silver is the best as the scarcity of the resources draws attention to it. He also states that bitcoin is still not at its best price.

According to the data provided by Trading View, gold prices are rising, followed by bitcoin. Analysts predict bitcoin prices will rise by $16,000 till the end of the year, and gold will reach $3,300. Analysts, however, anticipate bitcoin prices to jump at $35,000 by the end of the year. Robert Toru Kiyosaki earlier said that “Death of dollar. People desperate for money. Very sad. If [the] government gives you free money, take it yet spend it wisely. Do not save. Buy gold, silver, bitcoin. Dollar is dying.” He is an American businessman and author. Moreover, he is the founder of Rich Global LLC and the Rich Dad Company. Additionally, Kiyosaki is the author of more than 26 books, including the international self-published personal finance Rich Dad Poor Dad series of books.

Federal Reserve decreases Interest Rates

To stabilize the financial markets and decrease borrowing costs, the Federal Reserve has kept interest rates near zero to coast up the economy. It also chose to purchase hundreds of billions of dollars in bonds. That brought yields down, making gold and its return more attractive to investors. This lead to increase in prices of gold. Analysts state that the gold prices may surge. This, however, depends on interest rates. Moreover, it also depends on the upcoming November elections that are to be held in the U.S.

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