Commodities Attracting Interest in the COVID Economy
When the coronavirus outbreak began to spread around the world early in the spring, it caused virtually unprecedented stock market crashes. Major exchanges around the world saw catastrophic drop-offs, and even when markets bounced back there were doubts about the legitimacy of the rebound. Now, roughly six months into the crisis, major world stock exchanges are stronger than many might have guessed — but investors are still wary.
The simple fact is that people have witnessed an uncommon economic collapse, and there are no guarantees that there won’t still be subsequent waves of decline — say, if there’s a significant coronavirus resurgence, or if broad economic recovery slows enough to hurt the markets. None of this means that it’s not safe to invest in ordinary stock exchange, but the conditions are leading some to think about other markets. And it’s some of the leaders in the commodities sector that are generating much of the attention.
In particular, three major commodities have emerged as interesting investment options amidst the COVID economy.
Gold investment has always been a popular option in the commodities market, and has stood out particularly during major economic downturns in the past. The typical trend is for investors worried about the safety of their assets to transfer wealth from other investments — and sometimes their own everyday currency — into gold. Thus, when markets crash and popular stocks decline in value, it’s relatively common to see gold going in the opposite, positive direction.
These conditions more or less played out again in 2020, and actually continued to the point that gold reached an all-time high in value. Recent analysis has suggested that the climbing value of gold could continue to reach new heights as well, indicating that the positive effects haven’t run out just yet. Though there are no guarantees.
In a way, oil has actually experienced the opposite effect to what we’ve seen with gold. The coronavirus outbreak decimated the entire oil industry, halting transportation and economies around the world and thus all but eliminating the demand said industry relies on. This caused the price of crude oil to fall to unforeseen depths in the spring, and many investors lost money in the process.
Oil’s rebound, however — gradual as it may be — has provided opportunities that have gotten many interested in this long-valued commodity. Current indications are that traders buying into oil far outweigh those selling it. It appears that many saw the lower prices as an opportunity, to the point that oil quickly became a popular investment again even after its cash.
At one point, Bitcoin wasn’t even referred to as a commodity — let alone a stable one, or one that made sense as an investment. However, having survived its first decade, the cryptocurrency is now established as a serious, valuable resource, and a popular investment option.
That doesn’t mean that concerns have entirely dissipated. Cryptocurrency is volatile almost by nature, and Bitcoin has a long history of unpredictable movement and massive swings in value. For these reasons, plenty of investors won’t go near it no matter how valuable or mainstream it becomes. With regard to the coronavirus outback specifically though, Bitcoin has shown itself to be surprisingly reliable. Performing almost exactly as people expect to see gold perform in a time like this, it’s become a sensible stock market alternative to many investors.
Plenty more commodities beyond these remain popular among investors as well. These are three significant options though that have attracted interest specifically related to their responses to the coronavirus outbreak. They’ll likely continue to generate significant activity moving forward.