Invest in GOLD and give a boost to your investment portfolio
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Most of the countries remained in the state of lockdown in order to curb the spread of this noel coronavirus within their jurisdictions. The lockdown had caused a temporary stop on almost all kinds of economic activities, hence affecting the common people as well as the economies.
Just like in any other situation of economic crisis, a lot of people have begun stocking gold in the physical form depending on the current gold price in UAE. The market condition led to a rise in gold prices, which has impacted the gold rates throughout the world.
However, the question at hand is why do people want to stock gold?
There are many reasons why people wish to stock this precious metal at the time of economic inflation or crisis. Gold is amongst the commodities, which has managed to keep its value from as long as we can remember. Earlier, the Greeks, the Romans, and the Egyptians used gold as an offering to the Gods and for creating ornaments. Later, it came to be part of the currency systems because it was used for making coins.
These days, this golden metal has crossed all the barriers and has managed to maintain the value assigned to it. It still remains to be amongst the most precious metal sold on earth. Currently, the gold depending upon the current gold rate in Dubai or other Emirates is considered a popular tool for offering a hedge against an economic crisis or inflation.
The ability of gold to battle the instability in the economy is because of its high liquidity as opposed to the other investment instruments and commodities. Liquidity means that a particular commodity can be easily exchanged against cash. This precious golden metal is very liquid, that is, it can be exchanged against cash easily, and hence, this is the reason why people plan on stocking gold for the times of economic or financial instability.
Being a commodity, gold has an inverse relationship with different investment instruments. This means that whenever there is a crisis and different investment instruments begin to underperform, the gold rate in Abu Dhabi or other Emirates begins to rise. People start collecting gold as a liquid commodity depending upon the price of the gold in the UAE, hence causing a rise in the gold rates.
In the UAE, gold prices have increased gradually with the spread of COVID-19. The rise in the rates is pretty rapid in those zones and regions, which are worst affected by the virus. Moreover, since most of the countries have been facing a second wave of this virus, there is a risk factor, which has caused stress amongst the investors throughout the globe diverting them to other complex tools and assets.
The people and businesses in less-affected regions throughout the UAE have enjoyed less-restricted movement. The coronavirus pandemic has not just impacted the gold rate in Dubai for its physical forms but the non-physical forms also. Its non-physical form involves different programs and schemes, which allow the investors to make gold investments without having to worry about the security issues involved in stocking gold in the physical form.
A majority of the spot gold markets are shut throughout the world because of the lockdown. But an essential thing to be kept in mind here is that the experts have recorded stability in the rates. On the other side, the US is amongst the worst affected nations by the COVID-19; therefore, the value of US dollars has fallen. This has led to a rise in the gold price in UAE and other nations.
The pandemic has forced the administrations and governments throughout the world to take effective steps for reducing the outbreak of the virus. Europe is gradually coming out of strenuous lockdown wherein all the economic activities in the countries were almost curbed.
With Europe coming out of the lockdown state and resuming the economic activities, it can be predicted that the gold rate in Abu Dhabi, as well as other Emirates, will become normal soon. Other than gold, the prices of precious metals such as silver, platinum, and palladium have increased.
The Bottom Line!
The precious metal gold is counted as a safety instrument, which protects individuals as well as economies during political or financial uncertainties. Keeping the current situation in mind, the gold price in UAE and the other nations may keep rising until the pandemic subsides.
Most of the country’s central banks and individuals have already begun accumulating gold as soon as they can for protecting themselves from the worst-case situations. The present rate of gold in the UAE is the consequence of the political and economic situation that will settle only once the coronavirus is erased from the world.