Dear Iryna Kondrat,

Usually, during deep economic and financial crises, investments in certain assets, such as gold, some currencies, some types of real estate, etc., are treated by individual investors or investment funds as an investment with a relatively lower investment risk. After the last global financial crisis of 2008, many central banks increased their reserves in gold, securing financial systems against the possible emergence of further crises of this type. The current economic crisis caused by the SARS-CoV-2 coronavirus pandemic (causing the Covid-19 disease) is a specific crisis with atypical sources. In many countries, since March or April 2020, some countries have implemented specific anti-crisis socio-economic policy programs, including specific interventionist measures and instruments of monetary policy of central banking and / or fiscal policy in order to reduce the scale of the decline in economic growth. these programs have already started operating in some countries with significant success. Therefore, thanks to these measures and anti-crisis programs, the scale of the recession should be significantly limited. On the other hand, in some countries the currently starting economic crisis may turn into a long-term debt crisis of the state finance system. These are mainly countries in which tourism and related services, such as hotel industry, gastronomy, etc., generate a significant part of tax revenues to the state budget, i.e. these are sectors and branches of the economy whose share in the country's GDP is relatively high. In these countries, even if the recession is also short-term, the economic and debt crisis that remained after the Coronavirus pandemic may be long-lasting. If the applied programs, the so-called anti-crisis shields of interventionist support for enterprises through non-returnable financial subsidies will stop the growth of unemployment and the development of the economic downturn, then the currently developing economic crisis will not be deep and long-lasting. Then the economic crisis will be short-lived and relatively mild, and will not cause serious economic problems. In such a situation, investing in safe assets such as gold does not have to turn out to be a good investment in the long term. This thesis is also confirmed by the relatively short-term nervous reactions in the financial markets, including stock markets, that occurred in March and April 2020. But if in the future, in the coming years, there are further, deep financial and economic crises, it cannot be ruled out that investments in safe assets such as gold may turn out to be a good solution for the safe preservation of financial capital.

Best regards,

Dariusz Prokopowicz

Methinks during this crisis the price of gold would be expensive as most investors go for gold, diamond, and other good performing currencies. All in all, there is never a better time to invest in gold. Time is now...go for it

Dear colleagues,

I agree with your opinion that gold is considered a safe haven in troubled times like today.

Some analysts say, that gold could reach $2,000 this year. Нistorically, gold price is rising. Notice that the increase since the beginning of 2020 is part of a longer upward trend. In other words, it should not be attributed only to the COVID-19 pandemic.

Decisions of central banks on interest rates and inflation affect the price of the metal, since lower interest rates and higher inflation both make it more expensive. The same goes for exchange rates, in the sense that a weak US dollar will cause gold to rise. Then, there is supply and demand of the metal itself – gold mining is becoming more difficult over time, which is one reason for long-term increasing prices.

But if anti-crisis measures in response to the crisis become effective, then, in theory, the market could return to the price of $ 1,000 or even lower. In fact, gold price is not related to the dollar, oil or war, but the negative expectations of investors. Investors should also take into account transaction costs.

Yours sincerely,

Iryna Kondrat

I generally do not give investment advise. I do note however that there are predictions out there for gold going up to $3000 (from around $1900 at present) in 18 months. I have also seen higher numbers but these look less credible.

The story behind this is that COVID-19 forces the Fed to create more money, which historically has tended to boost the gold price and weaken the dollar. So it makes sense. Obviously uncertainty margins are wide, due to speculative (herd) behaviour. So while the trend of the gold price may be up (likely so), the volatility may be high so you investors could still loose money if they get the timing wrong (which is why I abstain from investment advice).

Long-term yes, short-term no

Iryna Kondrat I agree with Harald G. Dill. Investing in gold is advisable when you can afford to wait for 20 years or so and if it is only one portion of your investment.

In a covid time a big no! In long term as precious metal yes! Reserve of gold are limited.

Your recommendation and feedback is really appreciated. Best regards, Colin.

Iryna Kondrat please check out this potentially useful link:

https://www.cnbc.com/2020/07/20/investing-how-to-invest-in-gold-is-now-a-good-time-to-buy-gold.html

Dear colleagues,

thank you very much for your answers. They are very relevant.

Frank T. Edelmann your recommendation is very useful.

The question should be rephrased from “when” to “how much?”

There is no good time to buy gold ... every investor should have some in the portfolio.

Yours sincerely,

Iryna Kondrat

Dear Iryna Kondrat,

In my personal opinion it is too late. The good time was several years ago. The other issue is what is the purpose of your investment and how do you invest. If you want to speculate, it is not good time and gold is not the best option. Gold is good for long term investment (at least 20-30 years)... and second aspect - investing in gold never chose one moment. Better option is to buy slowly... e.g. today buy some gold, then after few months another part, and after next few months again and again. In this way you will invest in different times and the gold price will be different. And you will be sure that the average price is relevant. Otherwise, if you decide to buy a bigger amount of gold in one day, you can realize that the price is dropping the other day and you will be dissapointed... Please remember, investing in gold needs to have some knowledge about this form of investment.

Good luck!

P.

Dear Piotr Lasak

I agree with your opinion that investor should have some gold in the investment portfolio for a long time. Thanks a lot for your answer.

Best wishes

Iryna Kondrat