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Coronavirus: Impact on global economy

Coronavirus or Covid-19 is a deadly inflammatory respiratory disease that is now present in more than 170 countries. This started in China and slowly it reaches every nook and corner of the world. Due to Coronavirus, there is partial to complete lockdown in countries. The roads are empty, schools and offices are closed. The world’s trade is at its lowest ebb. Coronavirus has a profound impact on our global economy.

As we all know that there is a deep relation between Gold and the United States Dollar(USD).Whenever the rate of the USD decreases the graph of the gold price will always tilt up toward the y-axis because the rest of the world will start trading in Gold.

A brief history of Coronavirus

This Coronavirus began in Wuhan, China at the end of the year 2019 and slowly it spread in other parts of the world. The main problem is that there is no cure available; the scientists are doing their research on the virus to create an appropriate vaccine. Recently Representative Roche Pharmaceutical has announced that they have developed the vaccine of this virus and will be launched soon.

Current World Scenario

According to the research, the total cases of Coronavirus are 219,357. The total number of deceased patients is 8,970 and total number of recovered patients is 85,745. The following are some of the countries where Coronavirus is at its peak.

  • China with more than 3000 deaths.
  • Italy with more than 2,978 deaths.
  • Iran with almost 1,135 deaths.
  • Spain with almost 638 deaths.
  • France with almost 264 deaths.
  • United States of America with almost 155 deaths.

The only way to tackle the issue of Coronavirus was through management. We can observe from the above facts and figures that China has most deaths due to Coronavirus but the rate of newly arrived cases has decreased to minimal as they have managed in a great way.

The relation between USD and Gold

Gold and USD are always interlinked. From history, we can easily prove that whenever the value of USD decreases, there is an upward movement in the prices of Gold. Before USD the trade was accomplished in gold which was considered as an asset. However, the value of gold fluctuated since the old times. It is a general rule that whenever the value of USD decreases relative to other currencies of the world the value of Gold will increase. From the below picture, we can observe that whenever the value of USD increases, the value of gold decreases.

From the history of the United States, we can also observe that the value of gold increased during ‘The Great Depression’ i.e. the stock market crash of 1929. Similarly, President Richard M. Nixon increased the price of gold three times in the year 1971 to decrease the value of USD. He believed that this would decrease the inflation rate in the country.

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Coronavirus: Global economic impact

As discussed earlier that Coronavirus has a profound impact on our global economy. China is among the major traders in the world. According to the report submitted by the United Nation, there could be a loss of $ 2 trillion in the world’s GDP this year. As shown in the picture below.

The United Nation referred to this as a ‘Dooms Day Scenario’, as the world will grow only 0.5% due to the hit of $2 trillion and the collapse of oil prices. The countries are busy fighting this deadly disease and if this scenario pertained the value of Gold will keep on increasing and the world will ultimately start trading in Gold.

Impact on USD and Gold

Coronavirus has an impact on the global economy. We have seen that the value of gold is increasing day by day. As shown in the picture below.

 

The above image is of the gold price for the past 6 months. We can observe that the gold price in the past six months has been increasing since the outbreak of Coronavirus. Similarly, the news was also broadcasted on the television recently informing us that the value of USD is at its lowest ebb in the last 30 years. We can predict that the price of the gold will obviously increase if this scenario retains.

Conclusion

We can finally conclude the article by asserting that life, death, illness, and wellness is in the hand of Allah. Humans are unaware of their future, they can only forecast by looking at the past, however, only Allah knows the future of Gold or Coronavirus. The dollar is a piece of toilet paper. So it doesn’t matter whose hegemony is maintained in the world. In front of me, it’s only Allah hegemony and all humans are subjected to him only.

 

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