The price of gold hit its highest levels at above $2,000 but it began retracting form these his. Analysts and pundits were saying different things, some were saying that it was an indication that it might be the to diversify or cash in as it would never go higher and could actually drop down further.. others were saying the dip was expected and as long as there is uncertainty, we should expect the price of gold to rally. There was even talk of the price of gold breaking through to $4,000. It’s easy to dismiss that amount as fanciful but that’s what a lot of people were doing when predictions were made about gold hitting $2,000 in 2019.
The price of gold was largely driven by COVID in 2020, with the virus still ravaging the globe, the gold price will still continue to be affected by COVID. That is not going to change anytime soon. There are some key factors that are likely to push the price of gold higher.
The second wave and emerging variants
There has long been talk of a second-wave when the virus and it has hit a lot of countries. Some would even say, there will be a third, fourth and even fifth wave. What is worrying however is that the virus has found a way to evolve into new variants. These have been found in South Africa and the United Kingdom. A spike in the Corona Virus was expected when economies were opened but so far this hasn’t gone well. Health departments around the world are already buckling under pressure and a lot of businesses have had to rethink how they run their businesses. Companies are “restructuring” but when a company says it is restructuring itself it usually means that employees will be facing retrenchments and an uncertain future. Now is the time to buy gold bullion if you have gold bullion coins or bars, it could help you weather financial storm.
The Impact of the Covid-19 vaccine
Australia has been very pro-active in the fight against the decimation that COVID left in its wake. The quick development of the vaccine and the roll-out to many countries has been the most positive news we’ve had in a long time and logic dictates that this should have quelled gold’s price rally. It didn’t. Instead, fears and people touting “new world order” theories have increased resistance to the vaccine. This too will affect the economy, first of all because the vaccines are so expensive, there won’t be mass inoculations and then there’s the billions of people around the glowing who all need to be inoculated. It seems that even the positive news don’t promise positive outcomes.
The US dollar has been weakening. It has been falling, of course the news about the Corona Virus vaccine being rolled out might have a calming effect. Once the globe economy shows signs of recovering it is advisable to keep tabs on the economy to help you make the right decision of whether to buy gold bullion.
The impact of BREXIT
And then there’s Brexit. Brexit is sure to bring new tarrifs that will affect the price of gold. Brexit has cause a lot of tension in Europe. The question of whether to live or stay has caused some division and turmoil in Britain, but the deal has been finalized and a lot of the perks that European and British shared have all but dissolved. Britain once again is a sovereign country and will trade with Europe like it trades with other countries that are not in the European Union. Whether this is good or bad is yet to be seen, however it will have some impact on the price of gold.
The U.S elections went on with a lot on controversy. Donald Trump was reluctant to concede to Joe Biden and in the days leading up to the last days of his presidency Trump made history by being the first U.S president to be impeached twice, this time for causing insurrection by inciting protestors to hold demonstrations in the capitol which led to injuries, and fatalities. This will have an effect on the economy.