Gold, a safe-haven asset that has already seen a 25 percent increase in a year has recently experienced an all-time high amidst the coronavirus outbreak says Henry Powell, CEO of AAG Markets. With the growing fears of the investors, the riled stock market, and the recent oil drop, the global economic recession seems to be brimming on the horizon.
Either as a hedge or as a safe haven, gold has proven over the years to withstand even the most turbulent times or it’s no surprise investors are diving into it with the disruption in the stock market. Although this precious metal has experienced some ups and downs and continued volatility during this coronavirus crisis, it still holds better than stock and with authorities’ announcement to lose monetary policy further, some gains are brimming for gold.
With that said, the AAG Markets, a global financial firm, explores why gold is a must among investors’ portfolios during this coronavirus crisis. Read on!
Gold Still Stands Even When Other Assets Hit the Bottom Line
Does gold hold up during the stock market plunge? The answer is yes! This alone is more reason it has attained the safe-haven status and why many investors are scurrying to own gold in their portfolio.
Whether the occurrence was short-lived or extended over a couple of years, gold prices most times surge as it is bought as a hedge to the economic downturn. Oftentimes when stocks or bonds value decreases in response to events, the exact opposite has always been the same for gold.
According to the CEO of AAG Markets, there can be volatility in the price of gold in the face of severe events, however, investors should not panic as gold will always maintain its value throughout the ages.
It Might Decline, Past Occurrences Show this Never Last Long
There are uncertainties about how long, how severe and how far the impact of this coronavirus is going to be on the global economy. Uncertainties bring fear and fear brings panic. However, this is not the time for panic but to take advantage of the opportunities.
Let’s go down the memory lane and remember the global financial crisis of 2008. Even the so-called safe-haven asset was threatened. However, this precious metal has a good reputation for bouncing back in no time.
During the heat of the 2008 crisis, gold hit the bottom and was liquidated together with SP 500. Once the panic-driven swings subsided, it began to soar even though SP 500 was still experiencing a decline. The precious metal plummeted to an all-time high and rose up to 25 percent.
The bottom line is, even though gold might experience decline during a market plunge, this isn’t going to last for long, but instead do usher in the bull market. This might just be a great buying opportunity after all.
Gold Makes a Good Diversifying Element in your Portfolio
Moreover, gold has always been a home for safety not only during financial crises but also during geopolitical uncertainties. During political upheavals and world tensions, gold prices tend to rise above all odds.
Either as an inflation hedge or for protection during the economic downturn, this precious metal will always hold a high regard and one in which investors must include in their diversified portfolio. For more information please contact AAG Markets.