Today the Gold price has hit the highest price in the last 7 years. Seems that investors are looking for a safe option to store their money in the middle of the pandemic situation caused by the coronavirus.
The price of gold surged by 2% on Monday a level not seen since February 2013. The price hit $1,688.57 per ounce at one point to fall back minutes later.
The European stock market opened lower this Monday, with London FTSE 100 down by 2% and Milano’s main index down by 4%. Italy has the biggest number of people infected with coronavirus in Europe and the government is taking extreme measures isolating many small towns. At the same time, people seem to have panicked in Milano trying to store food leaving supermarket shelves empty.
Paris Cac-40 and Frankfurt’s Dax index also fell by 3% this morning.
Airline and travel companies were hit the most by the downfall. In the UK the worst-performing stocks are EasyJet with -10%, Tui with -9% and British Airways with -7%.
The overall market fall comes after warnings from companies about the coronavirus effect in their supply chain. Also because some companies are directly affected because their production factories are located in China.
Analysts think that with the momentum created, gold will break the $1,700 level soon.
Oil prices are down by 3% this Monday also because of the falling demand after the closure of many factories because of coronavirus concerns.
The surge of the gold prices might be a signal that will be blood on the streets soon and investors are quickly moving their wealth to a safe place.
On the other side, Bitcoin is fighting a battle for $10,000 and has failed to stay above this level for the 5th time. We have seen gold several times follow the gold patterns. Now the question if bitcoin, “the digital gold” will follow gold? Especially now that bitcoin fundamentals are very strong.
Feel free to post your opinion in the comments below.