The Impact of COVID-19 Pandemic on Gold Price: From Ultra-Short-, Short- and Medium-Term Perspectives Respectively

Abstract

As the coronavirus pandemic spreads, it is not just people's health is threatened, but the financial market as well. In particular, policies such as segregation, embargoes, etc. broke the relationship between supply and demand in the market and the depressed economy caused investors to lose confidence. The fear of infection during the COVID-19 pandemic led investors to favor the purchase of financial assets with safe-haven and hedging properties, such as gold. In this article, the daily, weekly, and monthly prices of gold per troy ounce in US Dollars from January 1, 2010, to February 24, 2022, were extracted and analyzed. Three ARIMA models were applied in the study to predict the gold prices based on the assumption of no pandemic exists. And comparing the fitted values with the actual ones. The study analyzes the impact of Covid-19 on gold price performance from three perspectives. An ultra-short-term analysis is from January 24 to February 6 based on the model built by the daily dataset. A short-term one from January 24 to March 8 according to the weekly constructed model. And a medium-term comparison from January 2020 to July 2020 with the monthly dataset. Additionally, the possible reasons to explain the result are provided to help different investors make decisions.