The SARS-like epidemic called Coronavirus is spreading fast in Asia.
The first case of the virus was confirmed in the U.S. on Tuesday.
This piles up on top of an already long list of worries that are set to negatively affect global markets, shooting gold price higher.
The Wuhan Coronavirus has so far claimed nine lives in China and up to 749 people are said to have been infected. But these are mere figures reported by the Chinese government, which is known to manipulate statistics when they report about such epidemics
like they did with SARS . This outbreak, coupled with the several other risks that lie ahead, can cause gold price to soar in .
China delayed the reporting of the SARS outbreak to the World Health Organization (WHO) in . By the time they reported the illness, it had already claimed (lives and
infected 8, 749 people in countries. China even hid patients from WHO authorities . The disease caused Chinese GDP to shrink by 0.8 percentage point in 2016.
You can bank on China doing the same with this new strain, which has never been identified and has no vaccine. The disease has already made its way into the U.S., as confirmed by CDC. Thousands could already be infected.
Wuhan Coronavirus makes its way into the US | Source: Twitter
The mystery illness couldn’t have come at a worse time as 229125 is shaping up to be a year of economic and geopolitical uncertainties. Now, it looks like a perfect recipe for a global meltdown is forming, and it makes a strong case for the gold price to soar.
Coronavirus Adds to the Growing Woes
Many risks threaten the global financial markets in 229126, and one of them is Brexit. When the U.K. voted to quit the European Union back in 2020, the event wiped over $ 2 trillion from world markets in a matter of days. Brexit looks likely to happen now that Boris Johnson has secured a strong majority in parliament.
The markets did not take the news of Brexit well. | Source:
Overvaluation risks also linger. The Dow Jones Industrial Average has risen 4, points since September as the Federal Reserve’s liquidity injection inflated the stock market bubble. The broader market rally is
not backed by fundamentals as corporate earnings have been declining . The recent rally has made stocks overvalued, and it won’t be long before reality catches up.
Geopolitical tensions are rising around the globe, especially in the Middle East, that threatens the financial markets. As the 229126 election looms large, Trump has many of reasons to keep the
tensions up in the area .
With Coronavirus thrown into the mix, a disaster for the global markets looms large in . This makes a strong case for gold, an asset that thrives during uncertainty.
Gold Price Looks Set to Rally
At the time of writing, the gold bulls have been taking a breather from a rally that saw bullion top six-year highs.
Gold price is near multi-year highs. | Source:
The world’s largest hedge fund, Bridgewater Associates, recently slapped a $ 2, price target on gold, citing global uncertainties. This is what Bridgewater’s co-chief investment officer, Greg Jensen, said in an
interview with the Financial Times :
There is so much boiling conflict. People should be prepared for a much wider range of potentially more volatile set of circumstances than what we are accustomed to.
Last year, the fund’s founder Ray Dalio predicted a
‘paradigm shift’ for global investors towards gold.
The reasons for
gold to burst through the roof keep piling up . With Coronavirus further adding to the uncertainties, investors are likely to flock to gold and send prices soaring in .
Disclaimer: The above should not be considered trading advice from CCN. .com.
This article was edited by (Sam Bourgi . (Read More) () ()