Could 2020 end, please? The pandemic is not over and the US suffers now from mass riots across the country. They could aggravate the coronavirus crisis and increase the demand for gold.
On May 26, a black man, George Floyd, was killed by the police in Minneapolis, Minnesota. During his arrest – he allegedly used earlier a $20 counterfeit bill in a nearby store – the police officer put a knee on Floyd’s neck on the ground, although the arrestee was not aggressive and repeated several times that he could not breathe.
Second, the mass protests during the pandemic is, um, well, not something what epidemiologists dream of. You don’t have to be a scientist to deduce that big demonstrations and large gatherings – and many protesters do not even wear masks – could accelerate the viral spread and increase the chances of the second wave of infections, or at least, hamper the deceleration of the epidemic. The longer and more severe the epidemic, the better for gold.
Importantly, although the direct reason behind the protest was police brutality against black community, the long period of social distancing and economic lockdown, spurring high unemployment, aggravated the civil unrest. We warned in late April, that we could see the premature reopening of the economies or even the riots. Now, we have both. Bad combination from the health and economic point of views, but quite supportive for the gold market.
Third, the civil unrest could also slow the economic recovery from the COVID-19 pandemic. The violent protests and looting destroyed some stores, buildings and cars, subtracting from the GDP. Many people already reduced their economic activity due to the COVID-19 outbreak – the new civil protests can add a new layer of uncertainty and subdued consumer spending and business investment. Hence, although not a game-changer, at least not yet, the riots could support the gold prices, especially if they contribute to the current depreciation of the US dollar.
Thank you.
If you enjoyed the above analysis and would you like to knowmore about the gold ETFs and their impact on gold price, we invite you to readthe April MarketOverview report. If you're interested in the detailed price analysis andprice projections with targets, we invite you to sign up for our Gold & SilverTrading Alerts . If you're not ready to subscribe at this time, we inviteyou to sign up for our goldnewsletter and stay up-to-date with our latest free articles. It's freeand you can unsubscribe anytime.
Arkadiusz Sieron
Sunshine Profits‘ MarketOverview Editor
Disclaimer
All essays, research and information found aboverepresent analyses and opinions of Przemyslaw Radomski, CFA and SunshineProfits' associates only. As such, it may prove wrong and be a subject tochange without notice. Opinions and analyses were based on data available toauthors of respective essays at the time of writing. Although the informationprovided above is based on careful research and sources that are believed to beaccurate, Przemyslaw Radomski, CFA and his associates do not guarantee theaccuracy or thoroughness of the data or information reported. The opinionspublished above are neither an offer nor a recommendation to purchase or sell anysecurities. Mr. Radomski is not a Registered Securities Advisor. By readingPrzemyslaw Radomski's, CFA reports you fully agree that he will not be heldresponsible or liable for any decisions you make regarding any informationprovided in these reports. Investing, trading and speculation in any financialmarkets may involve high risk of loss. Przemyslaw Radomski, CFA, SunshineProfits' employees and affiliates as well as members of their families may havea short or long position in any securities, including those mentioned in any ofthe reports or essays, and may make additional purchases and/or sales of thosesecurities without notice.
Arkadiusz Sieron Archive |
© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.