The price of gold has increased from $1,300 to $1,700 per ounce since last June.

Shunning equities, investors turn to gold amid coronavirus market rout – and the trend will continue

The rise in gold prices is set to continue, unless we see higher real interest rates combined with a large improvement in global risk appetite and international trade around the world. Neither scenario looks plausible at the moment.

10th Mar, 2020 - 6 min read

Last week, gold prices rose by around 7 per cent and reached levels just below $1,700 per ounce, which is the highest level since 2013. The large price spike reflected a huge increase in global risk aversion, due to fears about the economic effects of the Covid-19 coronavirus around the world. Gold rallied partly because asset prices for equities and bonds trade at extended levels and investors sought the protection of the yellow metal when other asset prices declined. 

Economists and investors have downgraded their growth forecasts and now anticipate that there will be basically no earnings growth in equity markets in 2020. Some large investment...

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