Coronavirus effects on global markets and goldPosted on Sunday, February 2 2020 at 7:49 pm GMT+0000
It is true that Cronavirus effects were first confined to the Chinese and Asian markets, but now started spreading to other countries. Its impacts on global markets are expected to escalate since it continues to spread at a rapid rate. A large number of companies and factories in China closed, including foreign and US companies, and thus, those markets will be affected. China’s travel restrictions prohibited more than 35 million Chinese tourists from leaving the country, and this has had an impact on the countries that usually attract them. Our world became interconnected, and the impacts of the virus are expected to extend to global markets.
Of course, gold benefited from deepening virus fears. Having risen by 19% and by 6% in January, the precious metal is expected to continue its Bullish run amid heightened risk aversion. Of course, several factors can support its strength, currently fears that Coronavirus could continue to plague markets for a while longer. Tensions in the middle-east, specifically any possible renewed US-Iran tensions, can also weight on sentiments, and it is possible that we witness new trade disputes between the US and other countries this year. All of these factors supports the positive outlook for gold and I expect it to continue its rise towards 1625$ first and then 1750$ at the end of the year.