Why is gold considered a safe haven in times of economic crisis?

George Abdullah, one of the gold producers in Egypt, said that if we want to know the direction and movement of the price of gold, we need to know the influences that make gold go up or down, including the dollar price at the global level, as well as bonds offered by large economy countries and the movement of the price of oil, and these variables affect the price of the metal on a daily basis.

He added, in special statements, that gold is currently linked with the news of the coronavirus crisis, because with the onset of the crisis, the country has started to move towards economic shutdown and global trade movement and investments have been affected, which has pushed the metal up more than 22% since Corona started because investors and companies have resorted to buying gold because it is a safe haven in this period of political and economic turmoil.

He continued, that gold is seen as a safe haven when stocks and international trade decline or in times of political and economic turmoil, and here investors are selling stocks and turning to gold in order to preserve value. of their money, in addition to these indicators of inflation in the main countries also have an impact on gold, so the higher the inflation, the higher the gold, because it is a store of value where investors look to preserve their money.

He pointed out that expectations for the future of gold are primarily related to the effectiveness of the coronavirus vaccine, so if there are good results and the vaccine distributions have had a positive effect, then the price is likely to fall and vice versa as well. because the position of the US plan to save the economy, which is forecast at 1.9 trillion, will have implications for the future of gold as it will affect the inflation index.