Even the world's main defensive asset - gold - suffers from a general sale. The fact is that investors cash out their liquid positions to fulfill exchange margin calls (requirements for adding funds).
As a result, the gold rate for the week fell by -9%, from $ 1,700 to $ 1,544 per troy ounce. There has not been such a big drop in a week since 1983! The yellow precious metal was followed by silver (-19%) and a record drop in palladium (-35%!).
According to experts, investors sold their positions in precious metals not only to cover margin requirements at other sites. In the gold, silver and palladium market, there is also a massive deletion. Many positions were opened with speculative goals and now they have to be reduced or closed.
The Bloomberg news agency said that the massive sale of positions in gold futures led to the fact that this asset has lost the status of a defensive asset.
However, despite the shock in the financial markets, the long-term outlook for yellow precious metals remains optimistic. If coronavirus leads to a decline in economic growth in the global economy or to a crisis, then the demand for the main means of saving will return.