The possible impact of Covid-19 on the global economy and gold performance

News 18.06.2020

At the end of April 2020, Oxford Economics, a company specialising in economic forecasting and quantitative analysis, developed four different scenarios to illustrate the possible impact of the Covid-19 pandemic on global economic development in the years to come. Based on these scenarios, the World Gold Council used its quantitative online tool “Quarum” to analyse how the gold price might perform under these conditions. The forecast of gold performance under the four scenarios is based on pure hypotheses, however, the results of the quantitative analysis are interesting.

Extreme scenarios: swift recovery vs. deep recession

Two of the Oxford Economics scenarios each cover one end of the scale: in the event of a rapid recovery of the global economy, gross domestic product (GDP) worldwide would decrease by 4 per cent, more than three times as much as in 2008, but would recover quickly in 2021. For gold, this could mean the continuation of the rally this year and next, but after that, the gold price would decline. The “deep recession” scenario, on the other hand, assumes a longer-term downturn of the world economy due to COVID-19 and does not expect a recovery of GDP on a global level until 2026, which could lead to a positive gold price performance until 2024.

Regionally limited scenarios: US and emerging markets

Another scenario describes a recession in the US, where the stock markets would lose up to 45 per cent this year, but would recover by around 19 per cent in 2021. In this case, the gold price would be likely to decline next year after a positive performance in 2020. The last Oxford Economics scenario deals with a possible collapse of the Chinese economy with historically unprecedented negative growth and corresponding effects on other emerging markets. In this scenario, the five-year performance for gold would most likely be positive, although according to calculations by the World Gold Council, it could decline in 2023 and 2024.
 

Upcoming Events

Events

22.10.2020 - 22.10.2020 Investment Fund Day of Börsen-Zeitung Frankfurt

Digital Conference

Events

02.11.2020 - 03.11.2020 Private Wealth Excellence Forum

Youtube channel

Production of Umicore precious metal bars

Production of Umicore precious metal bars

Opening Bell Event zum 10-jährigen Bestehen von Xetra-Gold (German)

Opening Bell Event zum 10-jährigen Bestehen von Xetra-Gold (German)

Gold als eigene Anlageklasse: Interview mit Steffen Orben (German)

Gold als eigene Anlageklasse: Interview mit Steffen Orben (German)

Please select the optional cookies to activate Youtube.

Newsletter

Are you interested in receiving regular information on Xetra-Gold? Then subscribe to our monthly, free-of-charge newsletter to learn more about our gold holdings, upcoming events and to read our gold market outlook.

Required mandatory fields are marked with an asterisk (*).

Your data, collected for the purpose of sending the above information, will be processed in accordance with the DSGVO, i.e. they are used exclusively for the purposes mentioned above. The data will not be passed on to third parties. You can unsubscribe from our information services at any time using the unsubscribe function.

Further information is available in our complete data protection declaration.

Xetra-Gold Newsletter

We are sorry that you consider to unregister from our newsletter. Are you missing out information? If yes, we are pleased to receive your feedback. Of course, you can always re-register at any later point of time.

Required mandatory fields are marked with an asterisk (*).

Your data, collected for the purpose of sending the above information, will be processed in accordance with the DSGVO, i.e. they are used exclusively for the purposes mentioned above. The data will not be passed on to third parties. You can unsubscribe from our information services at any time using the unsubscribe function.

Further information is available in our complete data protection declaration.

Xetra-Gold Newsletter

Xetra-Gold Hotline

Xetra-Gold-Hotline

Do you have questions? We have the answers. Contact us here: 9 a.m.–6 p.m. CET

+49-(0) 69-2 11-1 16 70

xetra-gold@deutsche-boerse.com

For press inquiries:media-relations@deutsche-boerse.com

To contact form