Without a doubt, the outbreak of the Coronavirus pandemic has contributed negatively to the world’s economy. With most people under lockdown and most businesses shut down, it’s sure that most sectors will get serious effects. Also, with Coronavirus having a lot of impact on the price of commodities, including Oil, Bitcoin, and Gold, we can only hope for better days ahead.
In this article, we’ll be looking at the impact of Coronavirus on Oil, Gold, and Bitcoin Price.
Impact Of Coronavirus On Oil Price
Like many other commodities, including gold, Bitcoin, and Cobalts, Coronavirus has a lot of impact on Oil prices. On Monday, there was a report about the US financial markets slipping with a plunge in the oil price to negative. It’s by far the worst chaotic experience for the US oil market. However, the reason for that is as a result of insufficient storage capacity coupled with a little demand for fuel, which made producers pay buyers to take from them. The effect had a huge effect on the US benchmark oil price, making them sell as low as -$40.32 per barrel in a day.
The USA is the world’s largest producer of oil, with over 17.87 million barrels per day. So, the collapse will be a big blow to Donald Trump, who has given a lot in the past years to protect the sector. Furthermore, the negative price tag shows the extent of the fuel crisis coming after the lockdown in major economic countries. Although not all oil contracts traded at negative prices, all of them had a drop in price.
Oil price back to a positive number
Today, there’s a report that the oil price is back above zero after a historic plunge in the industry. So, all we can do is keep our fingers crossed and hope that it doesn’t fall back again.
The impact of Coronavirus is huge on oil as it has forced many organizations to slash their capital spending. The plummeting price in oil has reduced the ROI for most mainstream investors and oil executives. Apart from drops in demand and price slashes, there are other impacts that coronavirus is having on the oil market. Some of them are the rig infections and restrictions on travel and closure of most offices. Last month, there’s a report by the Norwegian oil and gas company Equinor that one of its workers contracted coronavirus. The victim is one of the workers on the rig in the Martin Linge field. While there are no further cases, it forced the rig to shutdown operation. Also, restrictions on travel have a lot to contribute to the demand for fuel.
Impact Of Coronavirus On Bitcoin
Just like Oil, coronavirus also has a lot of impact on Bitcoin and Gold prices. It gave Bitcoin one of its worst crashes in the cryptocurrency market in a long time. Despite that, the market is now back in a stronger position than other markets. And that has resulted in most traders achieving huge results in this pandemic period. Although there were reports that Coronavirus didn’t cause the crash in bitcoin value, it’s unclear if that is true. Although some cryptocurrency traders are still enjoying the goodies that come with the Coronavirus pandemic, a lot of long-term investors are already pulling out. That’s because most of the time, they take the biggest hit and suffer huge losses.
Despite that most people, especially non-traders have predicted that Bitcoin will suffer during this pandemic period, the cryptocurrency has risen. I’m sure you know what Bitcoin halving means in the cryptocurrency industry. Yes, it helps to reduce the supply of new coins, resulting in price rise due to higher demands. Also, in the halving period, it becomes easy to predict the price of Bitcoins, although fluctuations occur.
Furthermore, with the 2020’s Bitcoin halving set to occur in May, traders should expect more from the event. So, we should be expecting excitement everywhere with the halving event fast approaching as it’s going to be a better opportunity for Bitcoin traders. Surely, there are uncertainties as to the impact that COVID-19 will have on Bitcoin prices in the nearest future. However, it seems like the effect is favorable now compared to that of Crude Oil and other market prices.
Impact Of Coronavirus On Gold
Unlike Bitcoin and Oil, it was predicted that Coronavirus will have a lot of favorable impact on the Gold price. However, that might not be the case as it was reported that its prices consolidated below its seven years high-price run. Well, they said it’s because of the US’s plans to restart its economy and strengthen the dollar. It happened with spot gold as it’s seen to slip more than 0.4%, to $1681.49 per ounce. Also, in a Reuters poll, analysts and traders forecast that palladium will be undersupplied despite the Coronavirus outbreak having its demands reduced. However, that didn’t change the fact that its rate has increased during this pandemic period. Here’s an increment rate of platinum, palladium, and silver according to CNBC.
Palladium rose 0.8% to $2,174.74 per ounce, platinum gained 0.4% to $778.07, while silver was up 1.2 % to $15.31 per ounce.
Also last month, Prime Minister Boris Johnson shut down the UK. Immediately after doing that, a lot of concerns arose about how to move physical Gold out of the LBMA. At almost the same time, there’s an update that refineries in Switzerland shut down to curtail the spread of COVID-19. All of these have their own way affecting the Gold market price across the world.