The gold price seems to be extremely nervous. While investors celebrated the new high at nearly $ 1,700 last Monday, even long-term gold holders panicked on Friday as we dipped below the $ 1,600 mark.
Especially the short-term movements in gold and the other precious metals, first upwards, caused astonishment, which I happily used on Monday last week to take profits.
This is of course a movement that makes the blood of many normal investors freeze in their veins, and I also understand that one or the other can easily get nervous. For someone like me who has been investing in gold and mining stocks for over 25 years, it’s more of a small fluctuation.
In the short term, there were also many beginners in the gold market who assumed a rally solely because of the corona virus. But gold is and remains an asset that develops its value in the long term and rarely sprints from one day to the next.
Corona virus has a firm grip on the exchanges
What the corona virus did now, on the stock market chart, can no longer be easily repaired. In the last financial crisis in 2008, gold initially corrected with the stock exchanges, but when the central banks started quantitative easing, the price of gold really went through the roof, going from around $ 800 to $ 1,900. Once again, the gold price can rise rapidly as soon as the Federal Reserve is likely to cut interest rates by as much as 50 basis points at its next meeting.