Gold glitters as viral gloom shines new light on rise in price since mid-Dec

GOLD has been enjoying a startling rise in price since the mid of December last year. This movement in the precious metal is attributed to the discovery of the new strain of coronavirus, now known as Covid-19. First identified in Wuhan, China, the respiratory virus has rapidly spread to the rest of the world, with the World Health Organization (WHO) declaring the epidemic a global emergency on Jan 30. At the time of writing, there has been over 78,000 confirmed cases of patients inflicted by the virus across the globe. Out of this, China has almost 77,000 confirmed cases and has reported a death toll of more than 2,000 people.

The economic impact as a result of the virus is great. China, largely recognised as the factory of the world, implemented various measures such as extending the Chinese New Year public holidays and locking down several cities in an effort to prevent the flow of people and stem the spread of the disease. However, this has invariably caused an impact on the global supply chain with disruptions felt across a multitude of industries, especially in manufacturing.

This overall bleak backdrop has driven investors and speculators to flock to gold with its traditional safe-haven status seen as a safeguard against uncertainty. This influx of buying has spurred the metal to break above the year high in addition to the previous seven-year high of US$1,611 per ounce. Gold prices traded to a high of US$1,619 on Feb 20 with the market sentiment that there is still headroom for the precious metal to climb.