The coronavirus (SARS-CoV-2) is taking its toll in an increasing number of countries. Every day, the media reports on new cases in different parts of the world. Not only is the virus knocking on our doors, wreaking havoc and causing panic, but its presence also has economic consequences that we may have to deal with for many months, or even years.
The coronavirus has its roots in China, an economy that is closely linked to global markets. As a result of gradual isolation and quarantine measures in China, many production plants have been shut down and transport has been restricted. This has affected not only trade, but also the catering industry, the service sector in general, and the tourism industry. According to analysts, if China's GDP reading is weak in the first quarter of 2020, there will be a high risk of a global economic slowdown or even a crisis.
The epidemic is not good for the global economy and is causing investment risk to rise dramatically. This has also been reflected in the Warsaw Stock Exchange. Over the course of a week, prices fell by 15%. The last time such large declines occurred in such a short period of time was in 2008, when the world was shaken by the global crisis. Comparing the data to the historic "black week" of the Polish Stock Exchange in 1994, the decline at that time was -15.88%. Things are bad, and not only on the Polish market. The coronavirus is also taking its toll on other stock exchanges – European, Asian, Australian, and both American. According to analysts, the Greek, American, and Polish stock exchanges recorded the most violent reactions to the threat of the virus and its derivatives.
The coming days bring further uncertainty about what will happen next, whether we will be able to stop the epidemic, and whether we can already say that we are facing a global pandemic. Observing what is happening on global markets, investors are becoming less and less willing to take potential risks. This, in turn, is influencing the search for ways to diversify investment portfolios. It turns out that precious metals are assets that are resistant to the coronavirus.
Safe haven
Recently, the price of gold has been reaching historically high levels. Compared to February last year, the value of the precious metal has increased by as much as 24%. This does not deter investors who prefer to put their money into something that will not lose value, but only multiply their profits. As a result, precious metals are becoming increasingly popular. Of course, a correction in gold prices is bound to come eventually. Analysts have been expecting it for over a year, but the price of gold continues to soar.
The situation on the markets will probably begin to calm down once we manage to defeat this deadly virus. However, no one can guarantee how long we will have to deal with the consequences of this epidemic. Let us hope that the predictions of some analysts will not come true and that we will not only find a cure for the coronavirus, but also quickly return to economic stability.
 (1)_LBMA.jpg)
English
German
Ukrainian
801 501 521
