Demand is High
One thing that is affecting the gold price forecast at the moment is the demand for gold. The uncertainty in several world economies is making people fear that their monetary gains will not maintain their value.
When you are worried about your currency, you turn to gold. This precious metal is valued no matter what, which is the reason the demand is so high at the moment. Currently, retail gold premiums have spiked about 11 percentage points for one-ounce coins or bars.
Crumbling Economies
The reality is that several economies have plummeted, and this fact is not only driving people to gold but is also spiking gold prices. The more currencies drop, the more a company or person can make when they sell the gold to someone else.
What is worse is that there is no cure for COVID-19, which means this pandemic is pretty much unstoppable. The best thing countries can do is slow it down and monitor it, but life cannot go back to normal just yet. Folks who are interested in gold need to pay attention to countries like Taiwan and South Korea that seem to be handling COVID-19 better than other developed countries.
Shortage is Happening
Amid COVID-19 mining of gold, refineries have become non-essential in many places around the world, like Mexico and Switzerland. It makes sense that governments want to do their best to stop the spread and protect their populations, so making a difficult choice like this one is only right.
This is a new reality people who are interested in gold have to cope with. With less gold available, the ability to purchase this metal might get a little more difficult. No one knows when production could get started again, and that could put pressure on near-term gold inventories. It may seem like a good thing for those who have gold, but people who don't and want to make a good decision for their futures should be able to buy some as well.
Potential Hoarding
Another possibility that may impact gold prices is hoarding. As mentioned earlier, mining is slowing down, and that shortage scares some gold owners as well. Some people might avoid trading until they know what is happening with this pandemic, which makes sense.
This will only create more pressure and could help the price of gold rise. Some people might keep their gold because they want to be able to say their monetary future is secure. You should hold on to this precious metal, but that doesn't mean you shouldn't trade it at all; you can trade when you see some stability.
Market Growth
The likelihood that this pandemic might cause the gold market to grow is very high. People are rushing to gold now, but there's still a lot of people who haven't purchased gold just yet. Furthermore, the uncertainty that this pandemic has created on several economies around the world is becoming apparent.
That level of uncertainty doesn't just go away. Worry can linger for some time, and this fact may make the gold market grow even more after this pandemic is over or a little more controlled. People are not going to trust their economies too quickly. A lot of people want to keep some gold because they've seen what could happen. People who weren't able to invest in gold during the pandemic might choose to do so to shield themselves from the next financial crisis. This could change the gold market and gold prices for a long time.
These are some ways COVID-19 is affecting gold prices and how it may continue to affect prices for a long time. If you own gold or want to buy gold, right now is the time to pay attention to the gold market, and all news linked to the market because everything is changing rapidly. Increase your knowledge so that you can make wise choices.
