Some investors buy precious metals in order to speculate on its growth. Another part invests in order to preserve its capital for the long term in the conditions of the growing crisis, because gold is an excellent asset for stabilizing the investment portfolio. The main factors supporting the gold market are negative interest rates, rising market risks and global debt.
The record increase in the price of gold in the European currency was mainly due to the exacerbation of the crisis in the global economy. The coronavirus epidemic, which went beyond China, added fuel to the fire. Many investors were able to make good money on the growth of yellow precious metals. But if in the near future it will be announced that a vaccine will be created and the number of infected in Asia will be reduced, then investors can easily lose part of their profit, that is, quotes will roll back. The same thing can happen if external forces intervene in the gold market and deliberately "drown" the precious metal.
Even before the coronavirus epidemic, the situation in the global economy was far from ideal. Growth was maintained only thanks to new cash injections from the Central banks. World debt continues to grow, and free liquidity has led to the emergence of various kinds of financial “bubbles” (stocks, government bonds, real estate, retro cars, expensive watches, etc.). Trees cannot grow forever in the sky, so after any boom there is a fall. Many analysts have been talking about this for a long time. It was unclear only what would become the trigger for the onset of the crisis. If the coronavirus does not become such a trigger, then sooner or later another “black swan” will appear.
Smart investors understand the hopelessness of the current state of affairs in the global economy and are gradually building up their positions in gold and silver. These precious metals survived all previous crises, which means they will survive future ones.