London/New York: New cases of Coronavirus have been reported from China and South Korea, who had claimed complete victory over Coronavirus. The fear of the second wave of Coronavirus hitting the world has become stronger with the revelation, and the repercussion of this was seen in the global economy. Gold rates spurted once again to reach USD 1,725 per ounce. Only last month, one of the banks in the United States had forecasted that the gold rates would reach the level of USD 3,000 by the end of 2021.
China, the origin of the Coronavirus pandemic, had claimed complete victory over the virus. South Korea, a neighbour of China, also had claimed that the epidemic was totally under control. But since the last few days, new cases have been reported from these two countries. Following this development, the indications are that the Coronavirus will rise again.
The repercussions of these fears are becoming evident in the global markets. A slide was triggered in various global stock markets on Thursday. At the same time, gold rates jumped, and transactions were reported at USD 1,725 per ounce. After the slide in the last week, this is the highest reported level.
Gold rates increased by nearly 30% in the last year. Thereafter, many analysts and companies had warned that the gold rates would reach USD 2,000 by the end of this year. A rise of 12% has been reported in the gold rates since the beginning of this year. The trend of the investors going for gold is likely to continue because of the slowing economies and fears of the Coronavirus pandemic.
As per a report published by the Bank of America, last month, the increasing trend in the gold rates is likely to continue until the end of 2021. It is likely that the central banks of all the major countries will announce huge economic packages because of the Coronavirus pandemic. The report claims that this will result in a fall in the interest rates, in turn increasing the demand for gold.
Meanwhile, it has been observed that many countries in the world are increasing their investments in gold. The Russian central bank informed that the share of gold, in the foreign reserves, has been taken to 19.5%. Reserve Bank of India also has purchased more than 40 tonnes of gold in fiscal 2019-20, including 6.8 tonnes of gold purchased in the January-March period.
The World Gold Council informed that along with Russia and India, United Arab Emirates had purchased 7 tonnes, Kazakhstan 2.8 tonnes and Uzbekistan has purchased 2.2 tonnes of gold.