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The COVID-19 coronavirus epidemic is worsening as the world watches. Augusta Precious Metals is committed to helping Americans keep up with related news as it affects retirement savings. Check your inbox often for Augusta blogs, weekly Touchpoints, and special alerts. One effect of the new coronavirus’s worsening trajectory is the strengthening of gold. The yellow metal’s safe-haven appeal is keeping its price buoyant. It has jumped 10% since the beginning of the year when the news first broke.
By contrast, risk assets are taking a terrible beating. On Monday, the Dow Jones Industrial Average suffered its worst day since the 2008 financial crisis, dropping nearly 8%. And the prognosis for both the markets and global economy is getting worse. One financial services giant says the coronavirus impact on global trade will be greater than that of the U.S.–China trade war. This week’s Touchpoint begins with a look at the potential devastation in store for global trade from the epidemic.
- Multinational financial services firm Allianz SE says the coronavirus epidemic will take a tremendous toll on global trade. They believe epidemic-related trade damage will dwarf even damage from the U.S.–China trade war. The firm projects global trade will lose roughly $320 billion each quarter the epidemic is active. Allianz chief economist Ludovic Subran pointed to estimated damage through Q1 2020 in a recent research note. He said, “In one quarter, global trade already suffered from the equivalent of the full-year trade war between the U.S. and China in 2019.” Ludovic expects trade volume to continue shrinking through at least Q2 2020. Before the epidemic, experts predicted global markets could fall as much as 40% with a persistent trade war. How much more could they fall due to the coronavirus? Worrisome, to say the least. Yahoo News has more.
- A recent article in Harvard Business Review plainly expresses the problem with the new coronavirus. When it comes to disruption of supply chains and manufacturing operations, they say, “the worst is yet to come.” And the disruption is just days away according to co-authors Pierre Haren and David Simchi-Levi. They write that “…the peak of the impact of COVID-19 on global supply chains will occur in mid-March, forcing thousands of companies to throttle down or temporarily shut assembly and manufacturing plants in the U.S. and Europe.” The core of the problem is in China, now the world’s second-largest economy and largest manufacturing nation. China’s effort to quarantine half its population means “we should brace for a major effect on manufacturing worldwide.”
- Scammers never let a perfectly good crisis go to waste. The current COVID-19 coronavirus outbreak is no exception. The gold price-surge in response to the outbreak is bringing out the worst in some people. CNBC says “networks of scammers” are preying on fears of savers worried about the epidemic’s effect on their portfolios. Precious metals analyst Adrian Ash told CNBC one of the favored scams is the “empty vault.” With this swindle, a supposedly legitimate dealer agrees to provide storage for metals you think you’ve purchased. As it turns out, the vault is empty because no metals were bought with your money. There’s one sure way to make certain you don’t end up a victim of a fraudulent gold dealer. Buy your gold and silver only from a highly reputable industry leader such as Augusta Precious Metals.
- Warren Buffett is not a fan of gold. In light of a comment he made in his recent annual letter to Berkshire Hathaway shareholders, perhaps he should be. The Oracle of Omaha is a well-known believer in the long-term potential of risk assets. That doesn’t mean he thinks they’re infallible, however – not by any stretch. In his letter, Buffett recently emphasized the inherent vulnerability of financial markets. He told shareholders anything can happen to the markets “tomorrow.” And that’s not all he said about how the markets can betray savers. Given the epic coronavirus-related volatility plaguing markets right now, Buffett’s “truth bomb” timing is excellent. For details, read the latest blog article from Augusta Precious Metals.
The sudden arrival of the coronavirus epidemic has rocked global society in a way few thought possible. Financial markets recently fell into correction territory in just six sessions. Many experts are now saying recession is unavoidable. In some places, fearful citizens are stripping shelves bare as they stockpile essentials considered vulnerable to supply chain disruption.
How You Can Be Ready for Any Financial Crisis
It’s hard to think of a scenario better suited for growth of a safe-haven asset such as gold. It has risen in value through history during serious economic crises. Sure enough, gold has strengthened steadily since the COVID-19 coronavirus began making news. If you’re ready to add gold to your portfolio, call Augusta Precious Metals at 800-700-1008 or visit Augustapreciousmetals.com. When you contact Augusta, make sure to ask how you can get our exclusive, informative guide and reserve a seat for the eye-opening Profit & Protect Web Conference hosted by chief economic analyst Devlyn Steele. We look forward to hearing from you.