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Coronavirus fears send gold prices soaring

Gold nugget
Gold nugget

Concerns about a deadly Asian virus becoming a worldwide pandemic have caused the value of precious metal to jump.

The Australian Bullion Company (ABC Bullion) confirmed gold commodity prices have significantly jumped since news spread of the Chinese novel coronavirus outbreak (covid–19) spreading to dozens of countries around the world.

New record predicted

At the time of publication the gold commodity price was almost US$1640 (A$2486) and Citigroup predicts prices are expected to hit US$1700 (A$2578) in the next six to 12 months, then US$2000 (A$3033) in the next 12 to 24 months. This means the value of gold is expected to exceed the all-time record high gold price of US$1895 set back in the year 2011.

“Market jitters will prompt investors to pile into the so-called safe haven asset to hedge against the stock market falling,” Citigroup said according to ABC Bullion’s website.

ABC Bullion global general manager Nick Frappell backs this view and predicts this trend is likely to continue if gold prices continue to stay above the US$1600 mark in March, as worried investors will move their money away from the sharemarket to treasury bonds and the precious metal both of which have historically been considered to be safer options.

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FX broker Pepperstone believes gold is likely to be the best choice if economic data “starts to deteriorate and central banks do not follow the markets leads with a dovish tilt” according to the trading company.

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