25 Feb What to Do During the Coronavirus Crisis: Stay Financially Healthy with Gold and Precious Metals
We are only 2 months into the coronavirus crisis. But the economic repercussions are starting to be felt. As we look to the future, what steps should be taken to ensure financial stability? Gold and precious metals have long been a safe harbor during times of uncertainty like this.
To paraphrase an old saying, when China sneezes, the world catches a cold. And unfortunately, this is turning out to be literally true with the coronavirus Covid-19. Even with quarantines ranging from entire cities to at-risk individuals, we are seeing more cases reported worldwide. And while urgent efforts are being made to develop a vaccine as well as to contain the disease’s spread, the impact of this crisis is being felt everywhere.
Even if you live somewhere far removed from Covid-19 patients, it is very likely you will also feel the effects of the virus. At least in your wallet. The Global Preparedness Monitoring Board, comprised of the World Bank and the WHO, estimated that the 2003 SARS epidemic caused a loss in productivity of more than USD40bn and that a moderate global pandemic could affect GDP by 2.2%, or around USD1.5tr. And although Covid-19 has not been deemed a global pandemic, this doesn’t mean you shouldn’t start taking precautions.
JPMorgan has already adjusted its forecast for China’s first-quarter growth from an impressive 6.3% down to 1%.
China’s economy is the world’s economy
As the world’s second-largest economy, China affects every portfolio, including yours. The situation in China has slowed manufacturing across multiple industries around the world. From automotive to tech, deliveries have decreased or ceased, which will show in bottom lines everywhere. Apple and other companies have already warned about their earnings. This, in turn, may wreak havoc on stock exchanges as other related companies feel the pain.
As companies need to tighten their belts during and after a crisis like this, investors must look to safe havens to protect their portfolios. Gold and precious metals, such as silver and palladium, are often looked to as a hedge against financial downturns elsewhere.
Protect your Gold and Precious Metals against Covid-19 with gold
You can see the security of gold from during the SARS crisis. Gold prices gained 27% during the height of the epidemic, March 2003 to March 2004. And gold has continued gaining value to this day. Already investors are flocking to this and other precious metals as they try to protect their portfolios, with gold prices reaching record highs in the last few weeks. Since the first recorded incidents of Covid-19 on 12 December 2019 to 24 February 2020, gold prices have increased around 14% from USD1,467 to USD1,671.
If gold prices are so high, why should you buy? We here at J. Rotbart & Co. believe that gold is a safe, long-term investment, during good times and bad. And we don’t think there is an end to the Covid-19 situation that won’t end without some financial and economic discomfort. And we’re not alone. Other analysts believe gold prices may reach as high as USD2,000 or even higher.
Nevertheless, with global efforts in place to address Covid-19, we look forward to this health crisis being resolved safely and soon with no negative impacts on you or your family. However, if you would like to discuss how gold and precious metals investing could work for you, please contact us. Our experts at J. Rotbart & Co. are happy to help you with all your gold and precious metals need.
Buy Gold with J. Rotbart & Co.
J. Rotbart & Co. is a boutique firm specializing in physical precious metals and other tangible assets.