Jewellery Stories
By Niki Bruce
1 May 2020

Gold prices sparkle as a safe-haven investment during Covid19

Gold has always been considered a safe-haven investment in times of upheaval, as people invest to help them cover losses in times of crisis, gold prices increase.  

Gold prices sparkle as a safe-haven investment during Covid19 ELEPHANT RING

Considering that the coronavirus scare has now held the world economy in its grip for almost four months, many investors have shifted their investments from stocks and other unstable assets to gold. 

Gold prices become more expensive

The increased demand for gold has exponentially pushed up the price. Interestingly, it is also being predicted that the high price for gold will continue into 2021. During the 2008 recession, gold prices also climbed quite significantly; and maintained its position, slowly rising, until it hit an all-time high in 2011. 

Gold prices sparkle as a safe-haven investment during Covid19 MANDALA RING

Market experts have, however, predicted that investing in gold should be done with some amount of caution – since becoming too skewed towards gold in your investment portfolio is not always a good idea. However those same investment experts also suggest that you should capitalise on gold company shares.

What are Gold Exchange Traded Funds?

Another new-age option for investment by people in times of such panic are Gold Exchange Traded Funds, which are basically funds that invest in gold and can be traded on the exchange. 

Gold prices sparkle as a safe-haven investment during Covid19 HERITAGE

Considering that the recession may even out and the economy will eventually pick up after the pandemic is over, it is considered a smart move to invest in gold ETFs – as these can be quite easily traded in the stock market for stocks once the market picks up and starts to grow. 

Owning actual physical gold might be better

However, it is important to note that gold EFTs are not supported by actual physical gold. “Unlike physical gold bullion—which is a tangible asset—ETFs are a financial product that have counterparty risk. Counterparty risk is present when there’s a possibility the other party in an agreement will default or fail to live up to their obligations,” writes Stephen McBride for Forbes.

Gold prices sparkle as a safe-haven investment during Covid19 MANDALA PIN

There is not enough physical gold in the world to match the amount of ‘online’ gold being traded. Should the economy worsen, and the stock market crash, you might actually be better off with some physical gold in your hands

Tips on how to buy physical gold

Seeking safety in precious metals such as gold has traditionally been the go-to for investors across the world in times of upheaval. With stocks of gold generally decreasing, now is the time to invest in physical gold while you can, particularly if prices are only going to increase. What better way to do that, than by buying something beautiful, and precious, like jewellery. 

Gold prices sparkle as a safe-haven investment during Covid19 ELEPHANT

Discover our fine gold jewellery collections: Mandala, Heritage, Yin & Yang and Shavings.

To have your own bespoke piece of jewellery either remade, or created new, call us at +65 6733 4100, visit our atelier at #05-04 International Building, 360 Orchard Road, Singapore 238869; or email us on bespoke@thejewelbox.com.

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