Gold has seen a surge in demand since the corona virus pandemic began. However, the majority of investors are not planning to purchase the precious metal for a short-term portfolio hedge in the current crisis, but rather a long-term investment. This is the result of a survey by the platform operator BullionVault. Only 2.9 percent of those surveyed actively trade in gold by buying and selling regularly. The main motivation behind gold investments is hedging against inflation and currency devaluations. This was stated by 37.9 percent of the survey participants. 27 percent want to diversify their portfolio with the gold investment.
The greatest threat to financial stability
Investors see the economic impact of the Covid-19 pandemic as the greatest threat to financial stability. Almost 61 percent of those questioned are concerned about this. This is followed by my fear of inflation (8 percent). Less than one in ten gold investors believe that political uncertainty, failure to find a Covid-19 vaccine, or social unrest will be the biggest cause of global economic instability.
Gold is also part of a broad investment strategy in many cases. Gold investments account for up to 20 percent of their total investments in over 41 percent of those surveyed. “By investing in gold, investors were able to offset inflation in the 1970s, the bank crash in 2008 and now the economic catastrophe of Covid-19 in 2020.