Commodity prices, including those of precious metals, are crashing. Not even gold can keep its status as a safe-haven metal.
Even bitcoin is plunging to new lows. Palladium, which had recently been soaring to historical heights and had become everyone’s favorite, has also crashed.
Oil prices are experiencing some of the worst months in the history
Oil prices haven’t only been dropping because of the lower demand stemming from Coronavirus, but Saudi-Russian interactions have also had an influence. These two friends, who have now become enemies, planned to flood the market with oil. While the production from the countries hasn’t ramped up as of yet, it is going to happen from April 1. Because of this, the oil market sees doom on the horizon. Brent and WTI are experiencing one of the worst months in their histories.
According to current market sentiment, oil price recovery isn’t going to happen any time soon.
Gold has lost its value
Gold is also losing its shine. Just a week ago, gold enthusiasts were confident that we just saw the beginning of a gold resurgence, thanks to the Coronavirus. They were sure that the precious metal would be a significant beneficiary of the pandemic. Earlier this week, gold hit a seven-year high. The metal has, however, lost its value. Kevin Grady, an experienced gold trader of Phoenix Futures and Options LLC, said that everyone was rushing for the exit with any gains they could find. Everything is getting crushed, and they are selling all their valuable positions to meet the margin calls in equities, said the trader.
Palladium’s high prices were short-lived
The Coronavirus outbreak is disrupting car sales, which may be related to palladium. In February, China’s car sales fell by 82 % according to the China Association of Automobile Manufacturers. Palladium sank 30% on Thursday, and on Friday, it had finished with its worst week ever.
Traders are opting for something more liquid and not tied to the automotive industry.
Bitcoin has lost its immunity
One would think that the digital nature of Bitcoin should protect it from a virus. However, Investors have panicked this week, which has caused the virtual currency to fall more than 50% in two days.
The crypto market has also lost $93.5 billion in only 24 hours.
No one has a handle on what makes bitcoin move. Still, there is a potentially hopeful prospect for bitcoin. The US struggles to handle close-downs, and Trump is preparing to declare a national emergency. Some bitcoin enthusiasts are holding out hope that the currency will suddenly become more accessible for online shopping.
Currencies Soars Amid Pandemic
Meanwhile, the dollar has seen breathtaking gains. Traders pulled their stakes from everything else and flocked to the most liquid asset available.
The dollar increased this week by 3%. Thursday’s increase by 1.75% was the index’s best day on record.
Analysts think that volatility and chaos in the market will not end soon. Traders will increasingly gravitate toward the dollar.