A look at gold during the coronavirus pandemic
The global economy struggles to break free from the coronavirus. No one knows when the pandemic will end, and many assets continue to see troubling times. However, gold is among those assets that performed strongly after WHO declared the pandemic last March 11.
Performance of gold since Coronavirus pandemic announcement
The novel coronavirus has infected over 5 million people around the globe, with around 2 million recoveries and 350,000 deaths. Countries prompted lockdowns and quarantine measures to contain the pandemic, resulting in sudden halt in global economic activities.
As fiat currencies are under pressure because of economic uncertainties and stuffed central bank balance sheets, interest in gold is growing. Gold has recovered by 18.47% from the lowest dip at $1451 on March 16 after the pandemic announcement. It is experiencing an unprecedented shift in value amid the pandemic confusion and istrading at its highest level since April 2012.
Spot Mini Gold in USD since January 2020
Safe-haven assets are taking the spotlight as they fare well against the fatal blows of COVID-19. XAUUSD is up by 13% since the start of the year and is trading at $1719 per ounce as of writing. It made a jump recently and crossed the threshold briefly at $1760.
The ensuing US-China tension surrounding Hong Kong made a huge impact on gold and other assets. XAUUSD experienced an intraday dip of 2.1% and dropped to $1717 on May 22 when China announced its plan to implement national security laws concerning Hong Kong. However, it was quick to gain back 0.7%, reaching a high of $1739 the following day. According to Tai Wong, BMO Head of Base and Precious Metals Derivatives Trading, China's aggression could heighten the already gray relations with the US and the possible aftermath prompted investor buying.
Gold continues to consolidate gains and many traders are eyeing a resistance level at $1729 with a strong support line at $1718.
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This article was submitted by SimpleFX.