Investors Sell Everything to get Cash as Quickly as Possible

The price of gold and silver registered sharp falls at the beginning of the new week, hit by general sales in all markets, in a context of extreme financial volatility not seen in decades.

Gold dropped about 4% to $ 1,478 an ounce, its lowest level since December 2019. The price of silver plummeted around 12% to the edge of $ 13.00 an ounce, its lowest level since July 2009. Although both metals are considered refuge assets in uncertain times, they cannot escape selling pressure. The market sentiment has changed. Seemingly, traders want to sell everything and get cash as fast as possible.

After the extraordinary rebound of the US stock market last Friday, many people believed that the crisis was over. However, the turmoil has returned this Monday, seeking revenge and catching many investors by surprise, despite the emergency stimulus measures adopted by the Fed on Sunday.

With the S&P 500 and Dow Jones crashing in early trading hours on Monday (close to 10%), many traders have been quick to liquidate their positions in various assets to get cash, and cover margin calls on accounts leveraged, thus exacerbating declines in all markets.

Coronavirus Caused Uncertainty in the Market

The coronavirus pandemic is affecting the financial markets. They continue to behave erratically and disorderly, giving way to unpredictable movements. Safe-haven assets could rebound in the medium to the long-term horizon due to uncertainty. However, the expansive monetary policy of central banks and the adverse effects of COVID-19 cause uncertainty in the short term. In this sense, it would be reasonable for all traders to remain out of markets until the financial chaos begins to diminish.

Coronavirus has killed over 7,174 people so far. The outbreak is affecting 162 countries in the world. 

Confirmed cases of the virus reached 182,764. Among them, 80,836 have recovered. 

According to WHO, the coronavirus mortality rate is 3.4 %.  It is far more than the seasonal flu death rate, which is less than 1%.

Flights and tours have been restricted in many countries. Germany was the last country to limit travel across its borders with Switzerland, France, and Austria. 

The least equipped countries, such as India and countries in Africa, are trying to delay the virus’s spread from other countries. 

Governments across the world have taken measures to prevent people from traveling and interacting socially. It can potentially reduce coronavirus transmission. Still, these measures aren’t enough. Countries need to take a comprehensive approach, says Tedros Adhanom, the Chief at the World Health Organization.