A rebound for gold amid jitters

AS the world ushers in 2021 after the festivities, it is likely there is still a way to go before we can expect a recovery of sorts, despite some early market optimism. Gold has staged an impressive rebound from the lows of US$1,820 per ounce to the recent highs of US$1,937.

Covid-19 cases around the world have continued to increase. UK Prime Minister Boris Johnson recently warned of more lockdown restrictions, while Japan declared a state of emergency for Tokyo. Germany too, is considering extending its lockdown to the end of January 2021.

Several countries have announced measures to help businesses and individuals cope with the adverse effects of Covid-19 on the livelihoods of people. UK Finance Minister Rishi Sunak has recently announced additional support grants totalling 4.6 billion euros (S$7.5 billion) to help support businesses. US President Donald Trump has signed a US$900 billion economic relief package that would result in eligible citizens receiving US$600. These are some of the actions taken to try to stem the effects of rising cases in US and Europe. With the influx of cases and a multitude of actions taken by various countries, it can be said that investors are less optimistic on the global outlook and as such, look to safe-haven options such as gold.