News on discovery of COVID-19 vaccine causes drastic drop in gold price

KUALA LUMPUR: The announcement on the discovery of vaccine for COVID-19, which has brought relief to everyone in the world, including in Malaysia, is said to be a major factor for the sharp drop in the price of gold lately.

Gold Investment consultant Syukor Hashim said the price of gold went up by 37 per cent from early January until August and it used to exceed RM300 a gramme, but the price dropped again to RM256 per gramme currently.

"The price of gold went up due to the threat of COVID-19 which has affected the world economy and the people are afraid to spend, which indirectly causes investors to choose gold as a safe asset.

"However, when news on the discovery of COVID-19 vaccine spread, it has to some extent, reduced the risk of the COVID-19 threat with economists and investors thinking the world economy will recover.

‘’Therefore, in this situation, gold is seen to have lost its attraction as a safe asset," he said when contacted by Bernama, here, today.

The media had reported that people are flocking to jewellery shops to take the opportunity of the drop in the price of gold to buy the jewellery as investment, and in their eagerness, many forgot about the standard operating procedures and the new norms to avoid the spread of COVID-19 when making purchases at the shops.

Asked when the gold price will go up again, n the price of gold was expected to end, Syukor said he could not predict it as the gold price is influenced by current news.

"For example, the power transfer in the United States between Joe Biden and Donald Trump, if there is a 'drama' between them, the price of gold can go up again, likewise on the news about Iran claiming that its nuclear scientist was killed by Israel.

"In other words, the rise in gold price is not only due to COVID-19, but many other factors, and for this year, it is the pandemic,” he said.

Meanwhile, a survey by Bernama at several jewellery shops here found that there were fewer customers today that during the weekend.

A gold trader at the Keramat Urban Transformation Centre (UTC), Munirah Aqilah Mohd Zahari told this Bernama reporter that last weekend was a very busy day for her as the number of customers at the shop doubled from normal days.

‘’Generally, the public took advantage of the low gold price to exchange their old jewellery while some wanted to order new ones as investments and accessories to be worn.

"Despite the large number of customers, they are still required to observe the SOP, such as physical distancing and to scan their body temperature, as well as register their names, before entering the shop,” she said.

Another trader, Nik Ahmad Tarmizi Nik Hassan said many buyers took advantage to buy jewellery using their savings even though the price of gold was expensive at the beginning of the implementation of the moratorium.

"Many customers came using the money for their car or house loan to buy jewellery as a long-term investment," he said.

-- BERNAMA